Tribune Suitors Criticize Auction

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As Tribune Co. leans towards accepting an offer from Chicago real-estate magnate Sam Zell, erstwhile bidders Ron Burkle and Eli Broad are raising objections that Tribune didn’t give them fair treatment in the bidding process, the Wall Street Journal reports.


Mr. Zell’s bid for Tribune proposes to use an employee stock-ownership plan to take a majority stake in the company, which owns the Los Angeles Times, the Chicago Tribune, 23 television stations and a minority stake in the Food Network and the Chicago Cubs baseball team. The company put itself up for sale in September and has fielded offers from a number of bidders. While the company is also considering a recapitalization on its own that would involve a spinoff of its TV stations, Mr. Zell’s offer has taken the leading edge in recent days.


The two California businessmen on Saturday sent a letter to Tribune’s board saying they want to see details of the employee stock-ownership plan that would be created in a Zell deal. They complain that the company favored Mr. Zell by giving him detailed information necessary for an ESOP structure. They note that if they had that information they may be able to make a better offer.


The move is designed to create more pressure on Tribune’s board, which has been weighing options for Tribune for months. The company has promised a resolution to the deal by the close of the quarter, which ends this week. The board is scheduled to meet this week to make a decision on the auction process.


Mr. Zell’s offer, which is valued at about $33 a share, represents a premium of about 8.1% to the company’s closing stock price Friday. It would make use of an ESOP that confers certain tax benefits. Mr. Zell entered the bidding in January, after the deadline for bids, and the company has been negotiating with him ever since.


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