Have billionaires Eli Broad, Ron Burkle and Sam Zell run out of ways to spend their money? Maybe this explains their bidding war for Tribune Co. (NYSE:TRB).
Last night, Broad and Burkle said they would pay $34 per share for the Chicago-based media company, $1 more per share than an offer Tribune was on the verge of accepting from Zell. Both deals would be financed through employee stock ownership programs, according to the Los Angeles Times.
Broad and Burkle will invest $500 million in Tribune, more than the $300 million Zell reportedly offered, the paper said.
Money, though, isn't going to solve Tribune's problems.
Big city metros such as The Los Angeles Times are particularly vulnerable to competition from the Internet and smaller local papers. Tribune's largest paper also has had turmoil in its management ranks that reportedly has hurt morale in the newsroom. The other big Tribune papers like Newsday, The Baltimore Sun and the Chicago Tribune have similar problems.
Zell said he plans to keep Tribune intact. I don't think Burkle and Broad have made a similar pledge. Regardless, the Chicago Cubs are probably going to get a new owner at some point in the not-too-distant future.
These wannabe press lords may regret having their wish come true.
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Reader Comments (Page 1 of 1)
3-30-2007 @ 6:28PM
Michael Schneider said...
There is considerable skepticism about investing in newspapers now with even Warren Buffett expressing concerns about the changed business environment. On the surface it appears to be an area to avoid but there are hidden values in many of these companies and the stock prices are down. Things could get worse but on the other hand the best value investments come with analysts shaking their heads. A decade ago people were laughing at gold stocks- I bought Glamis for around $2 a share and have huge percentage gains there. Many people pronounced tobacco stocks dead because of their legal problems not long ago. They are back. Oil was in the dumps for many years and looked like a questionable investment. Nobody thought steel would come back as a viable investment. Tribune and others may not find ways to get out of the situation they are in but the payoff could be high if things work out. In any case Sam Zell made billions in investments and not only in real estate. Does he just have too much money burning a hole in his pocket? I suspect he sees some value in the Tribune that others may be missing.
Items about Sam Zell are available free for those interested in the Sam Zell area (left side. above Trends section) at http://Barrelomoney.com.
3-30-2007 @ 3:51PM
Michael Schneider said...
There is considerable skepticism about investing in newspapers now with even Warren Buffett expressing concerns about the changed business environment. On the surface it appears to be an area to avoid but there are hidden values in many of these companies and the stock prices are down. Things could get worse but on the other hand the best value investments come with analysts shaking their heads. A decade ago people were laughing at gold stocks- I bought Glamis for around $2 a share and have huge percentage gains there. Many people pronounced tobacco stocks dead because of their legal problems not long ago. They are back. Oil was in the dumps for many years and looked like a questionable investment. Nobody thought steel would come back as a viable investment. Tribune and others may not find ways to get out of the situation they are in but the payoff could be high if things work out. In any case Sam Zell made billions in investments and not only in real estate. Does he just have too much money burning a hole in his pocket? I suspect he sees some value in the Tribune that others may be missing.
Items about Sam Zell are available free for those interested in the Sam Zell area (left side. above Trends section) at http://Barrelomoney.com.