Chandler Family Bids for Tribune Co.

Two L.A. Billionaires Also Make Offer

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CHICAGO (AdAge.com) -- The Chandler family -- which sold the Times Mirror Co. to the Tribune Co. in an ill-fated $8 billion 2000 merger -- were one of at least two parties to bid for the Chicago-based media conglomerate yesterday.
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Photo: AP

The Chandler family, once the owners of the 'Los Angeles Times,' want control again.

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Not a premium price
The bid from the Chandlers, the company's largest shareholder, values Tribune at $7.6 billion, according to a filing with the Securities & Exchange Commission. It proposes to pay all shareholders a $19.30-per-share dividend to acquire Tribune's publishing business -- which includes the Los Angeles Times, Chicago Tribune and Long Island's Newsday, among other papers -- as well as all of the shares of a new, spun-off company comprised of Tribune's broadcasting and entertainment assets.

The Chandlers valued the offer at $31.70 per share, the filing said, which is hardly a premium over the $30.95 price the shares were fetching this morning after rising 2% following news of the bids.

The family noted, however, that shares only rose from the $27 range early last year after the family began agitating for a sale, sparking breakup speculation.

Taking credit for stock price hike
"As a result of the publicity surrounding the disagreements between ... the 'Chandler Trusts' ... and Tribune management and the public nature of this process, it has been widely observed that the current market price of Tribune common stock is inflated by the expectation of a transaction," the family wrote. "In an undisturbed market, the true value of Tribune common stock would be substantially less than its current market price."

Nevertheless, two other bidders may be bidding more for the company. A competing bid from Los Angeles billionaires Eli Broad and Ron Burkle valued the company at $8.2 billion, about $34 per share, according to news reports. That proposal reportedly involved the billionaires owning 30% of the company's stock, which would remain publicly traded, while current management remained in place.

The company at least now has options, as there was speculation in recent days that Tribune Co. might not receive any bids at all. As Benchmark Co. analyst Ed Atorino told Reuters: "Lo and behold, there is a Santa Claus."
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