Tribune Co.’s largest shareholder offered to buy the media conglomerate and spin off its broadcast division in a deal valued at $7.6 billion.
CHICAGO (AP) _ Tribune Co.’s largest shareholder offered to buy the struggling media conglomerate and spin off its broadcast division in a deal valued at $7.6 billion.
The bid by the Chandler family, which owns 20 percent of Tribune stock, was disclosed Thursday morning in a filing with the Securities and Exchange Commission.
The Chicago-based Tribune, the nation’s third-largest newspaper company, had set a Wednesday deadline for submitting proposals. It was unclear if other bids were submitted, but it was reported late Wednesday that Southern California billionaires Eli Broad and Ron Burkle offered a plan that would put $500 million into the company, along with a debt package that would allow a dividend payment to shareholders. In exchange, Broad and Burkle would get about a 30 percent interest in Tribune and seats on the board.
The Wall Street Journal reported Thursday morning that at least three groups submitted offers.
The Chandlers are offering $19.30 per share in cash as well as stock in a spinoff, Tribune Broadcasting, which would include the company’s broadcasting and entertainment operations. Combined, the value to shareholders would be $31.70 a share, a 4.5 percent premium over Tribune’s closing price of $30.34 on Wednesday.
But the Chandlers said their offer is an 18 percent premium over what the company would have been trading at absent takeover speculation. Tribune shares rose 21 cents to $30.55 in morning trading on the New York Stock Exchange.
The Chandlers’ offer will expire Jan. 31.
A Tribune spokesman did not immediately return messages Thursday seeking comment. Messages left early Thursday for representatives of Broad and Burkle were not returned.
Despite initial hopes the so-called auction might draw a bid from a deep-pocketed private equity firm or another media giant, preliminary bids were weak and the deadline was extended by two months.
The Chandlers had been thought to be the likeliest party to make a last-minute offer for the company. But the Los Angeles Times, which the family formerly owned, reported Wednesday that they were leaning against bidding.
Tribune holdings include the Los Angeles Times, Chicago Tribune and nine other daily newspapers; 23 television stations; Internet ventures; the Chicago Cubs baseball team, and sizable stakes in the Food Network and the CareerBuilder online classified advertising venture.
The Chandlers said in the SEC filing that they would own 51 percent of Tribune after the deal closed and the remaining 49 percent would be held by two private equity firms, whose names were not disclosed.
Debt financing for the Chandler bid would be provided by affiliates of Goldman Sachs, Merrill Lynch and Citicorp, according to the filing.
Tribune’s stated timetable for a decision on its direction remains sometime between now and the end of March. The Chandlers said their offer, if it is accepted and receives shareholder and regulatory approval, will take about six months to complete.
Tribune said in September that it was willing to sell all or part of its assets following pressure from some of its largest shareholders, including the Chandler family, who were disappointed with the company’s lagging stock price and slumping fortunes.