Reports: Front-runner emerges for AEG as others begin bowing out

AEG2.jpgThe Santa Monica.-based investment firm Colony Capital, which is headed by billionaire Tom Barrack, appears willing to pay more than the other bidders, Bloomberg reports, but its offer for Anschutz Entertainment Group is said to be below the $8 billion or so asking price (the AEG people initially had been looking for $10 billion). The company, which includes a mix of sports and entertainment properties (Kings, Galaxy, part of the Lakers, Staples Center and numerous concert venues around the world), is proving to be a tough sell. Guggenheim Partners, which owns the Dodgers, has either dropped out or is about to (depending on which reports you believe), and L.A. billion Patrick Soon-Shiong, who is leading a group that includes Steven Mnuchin, chairman of Pasadena-based OneWest Bank, is unlikely to make an offer that's close to $8 billion. With possible resistance to the price (and keep in mind that the information is spotty), it's always possible that another group might leapfrog over everyone else. On the other hand, billionaire Philip Anschutz might be faced with either accepting a much lower bid or pulling the company off the market. AEG wanted to have a deal by the end of March. From the WSJ:

Any buyer who steps up for AEG at the price the sports and entertainment conglomerate is seeking likely won't be doing it for the current earnings. For the most recent year, AEG's earnings before interest, taxes, depreciation and amortization stand at about $350 million, according to people who have reviewed the closely held company's numbers. In comparable transactions, earnings in that range would suggest a value of under $5 billion. But deal makers at Blackstone Group who are handling the sale set a goal of selling AEG for $7 billion to $11 billion, according to people involved in the process.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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