The bids are in and the results reported so far are murky. According to the Tribune-owned LA Times, none of the bids really covers the whole company. Here’s how it shakes out based on the LAT’s take:
— The Chandlers, who, it could be said, started this mess when they sold Times Mirror to Tribune, and then contracted a royal case of seller’s remorse when the results didn’t pan out as hoped, want to control the newspapers and spin off broadcasting. The family is the largest Tribune shareholder with 20 percent.
— Fellow Southern California billionaires Eli Broad and Ron Burkle would recapitalize the company, acquire one-third and leave Tribune management in place. High-risk as described and raises the question of whether a re-cap could be accomplished without the two. The bid includes a $27 per share cash dividend (about $6.5 billion) to be paid after the deal closes.
— An undisclosed PE company bid for the broadcast stations.
Given that Broad and Burkle only want the LAT, from one perspective, this could be the highest price ever bid for just one paper. In reality, what the bids — or lack thereof — really say is nothing very good about Tribune Company as a whole. Or, as a correspondent of mine just said by IM, “the Predators’ Ball Orchestra is in the house and tuning up for another grand performance.”
More to come.
Update: Because the Chandler Trust ia major shareholder and hold seats on the board, their offer has been filed with the SEC:
— The offer would combine $19.30 in cash with the value of shares from a spin-off of Tribune Broadcasting and some entertainment businesses; they estimate the value at $31.70 a share for a value of $7.6 billion
— It estimates the company’s Food Network investment to be worth at least at $700 million.
— The Trusts reps contend the way information was provided by Tribune made it difficult to finish agreements and required due diligence.
— The need for 80 percent shareholder approval is expected.
— The bid includes an argument that without the runup in stock price caused by the bidding process, the offer would represent an 18 percent premium. It would be a 4.5 percent premium to Wednesday’s closing price of $30.34.
Chicago Tribune: “One source close to Tribune said the company was highly skeptical of both deals and Wall Street analysts said that as the board meets Saturday to consider the offers, it would likely take a hard look at structuring some sort of self help deal.”
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