Tribune keeping Times

All or nothing sale remains option

Tribune Co. said Thursday that it doesn't plan to sell the Los Angeles Times to David Geffen or anyone else just yet -- though speculation continues that someone might still buy the entire media group.

On Tuesday, Tribune said it was selling two Connecticut newspapers to Gannett for $73 million. Two days later, Tribune said it would be hanging on to its other nine papers, which include the Times and the Chicago Tribune.

"Our newspapers are clear leaders in the major markets they serve and fit into our strategic focus on larger publishing and interactive businesses," Tribune publishing president Scott Smith said. "While the special committee of our board of directors continues to oversee Tribune's exploration of strategic alternatives, we have no current plans to sell additional newspapers."

That will disappoint DreamWorks co-founder Geffen and others locally who have been mulling how to gain ownership of the Times, either via a direct purchase of the newspaper or by taking over all of Tribune. The decidedly pricier second option appears the only remaining route for such wannabe Times owners, meaning they will have to come up with newly compelling offers for the whole Tribune ball of wax or watch someone else cart off their target asset.

A report surfaced this week that a Chicago billionaire's bid for Tribune was getting more traction than the Los Angeles-based offers. It has been known that real estate tycoon Sam Zell was interested in Tribune, but there was no previous evidence that Tribune execs would find his overtures any more interesting -- or lucrative -- than the other offers.

Besides Geffen's high-profile tire-kicking, those included a joint bid from Los Angeles billionaires Ron Burkle and Eli Broad. Geffen's moves appear limited to his floating an informal $2 billion bid for the Times early on in Tribune's strategic review.

More recently, most speculation has revolved around a potential Tribune restructuring, perhaps involving a move to take the company private.

On Wednesday, the Times quoted an insider at the Chicago-based media group as suggesting a Zell bid was getting serious consideration by the Tribune board. A Zell spokeswoman declined comment, but it is believed his plan also would take Tribune private.

In addition to its newspaper group, Tribune also owns 24 TV stations and Major League Baseball's Chicago Cubs. Those holdings also have figured in speculation over more limited asset sales.

Investors have mostly kept their powder dry throughout the long-running speculation over Tribune's fate, showing little excitement over positive or negative speculation.

Los Angeles' Chandler family -- former Times owners and continuing Tribune shareholders -- prompted the current strategic review at Tribune by grousing over the value of their shares and even making their own offer for Tribune. Washington-based private-equity firm the Carlyle Group also has advanced a Tribune bid.

Tribune shares fell 14 cents to $29.93 on Thursday, dipping below the $30 mark for only the second time in the nearly six months the company has been under strategic review. Tribune execs have pledged to conclude the review by month's end.

When Tribune first announced its asset review in September, veteran newspaper analyst John Morton predicted it would be highly unlikely that the company ever would pare off the Times in a narrow asset sale. The announcement that the Times will remain in the company fold seems to validate Morton's contention that Tribune simply couldn't do without the Times' contributions to its corporate cash flow.

"It suggests that the management and the directors that support them intend to keep the company together, whether that's in its present incarnation as a publicly traded company or perhaps in a leveraged buyout," Morton said Thursday.

But should the company go private in a leveraged buyout, Tribune might fashion a controlled spinoff of its broadcast group, he added.

"It could be a bifurcated thing (especially) if they can do it in a way in which they can spin off the TV stations but Tribune can maintain management control with majority ownership," Morton said.
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