Zell reported closer to deal for Tribune Co.

Chicago real estate mogul now believes he has 50-50 chance to buy media conglomerate, according to report in one of chain's top papers.


NEW YORK (CNNMoney.com) -- Chicago real estate mogul Sam Zell has reportedly become a front runner to buy the Tribune Co. media conglomerate, which has struggled to find a buyer whose offer was acceptable to the company.

The LA Times, one of the papers owned by the Tribune Co., reported that Zell's bid would take the company private and that Zell now believes his chance of buying the company to be about 50-50, according to someone who has spoken to him about the negotiations.

Sam Zell.
Sam Zell, the Chicago real estate tycoon, is reported to be closer to a deal for media conglomerate Tribune Co.

The paper said that assessment of his chances would be at odds with a public comment Zell made at a real estate industry event last week in which he called his bid for the company something of a long shot.

The company, whose holdings also include the Chicago Tribune and nine other newspapers, 23 television stations, cable networks and the Chicago Cubs baseball team, has seen its stock lag as it tried to find a buyer who would pay significantly more than the $7.3 billion market value.

The Times reports that Zell's offer could buy out the disgruntled Chandler family, the company's largest shareholder which has pushed to take control of the company's newspapers.

The deal would take the company private, giving ownership to a partnership between Zell and an employee stock plan which he would set up to limit his tax bill, according to the report.

The paper reports the media conglomerate's financial representatives have been negotiating with Zell in an effort to drive up the value of his offer, said an executive with the company and a businessman who has spoken to Zell.

Other interested bidders for the company or some of its assets include Los Angeles billionaires Eli Broad and Ron Burkle, who offered to reorganize the company and pay a large dividend while borrowing heavily, a private equity firm proposed to buy Tribune's television stations and entertainment mogul David Geffen, who reportedly bid $2 billion for the Los Angeles Times alone.

In addition, media conglomerate News Corp. (Charts) Chairman Rupert Murdoch is on record saying his company is interested in working with the Chandler family in its bid for the Tribune Co., with an eye towards setting up a joint operating agreement between News Corp.'s New York Post and Tribune Co.'s Newsday.

Zell his Equity Office Properties Trust last month to Blackstone Group, a New York private equity firm, for $23 billion in cash. His stake in the nation's largest owner of office real estate was worth $264 million, according to the company's Securities and Exchange Commission filing showing him with 4.8 million shares and options of the company at the time of the sale last month.

The newspaper industry has been battered by declining revenue from reduced advertising and readership, as alternatives in online media have started to eat away at that revenue base.

Still, a number of other high-profile billionaires other than Zell, Broad, Burkle and Geffen from outside the newspaper industry have been reported as being interested in buying newspapers in the last year.

Interested buyers reportedly include former General Electric (Charts) Chairman and CEO Jack Welch, whose name has been tied to a possible purchase of the Boston Globe from the New York Times Co. (Charts), Maurice "Hank" Greenberg, the ousted chairman and CEO of insurer American International Group (Charts), has been reported to be interested in both the Times and the Tribune Co., although a spokesperson for Greenberg denied a report he was buying Times shares.

A privately held firm led by public relations executive Brian Tierney bought the Philadelphia Inquirer and Philadelphia Daily News for $515 million in 2006 when the former owner, Knight-Ridder, agreed to be sold to McClatchy (Charts) in response to shareholder pressure.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.