L.A. fat cats start paper chase
L.A. billionaires Eli Broad and Ron Burkle have joined together to submit a bid for the Tribune Co., the Chicago-based conglom that counts the Los Angeles Times among its media properties.
Bid was submitted by Broad’s investment company and Burkle’s Yucaipa holding company, but details of how much they offered were unavailable. Neither Broad, who made his money in real estate and home building, nor Burkle, who owns the Ralph’s empire, responded to requests for comment.
While both had been mentioned as prospective buyers for the Times, their bid is for the entire Tribune conglom, which includes 11 daily papers, 25 TV stations (including KTLA) as well as the Chicago Cubs baseball franchise.
David Geffen, another local billionaire who has expressed interest in owning the Times, was not available for comment on Wednesday.
While there’s no sign that Geffen is working with Broad and Burkle, all three have criticized the Chicago-based management of the Times. Tribune shifted Chicago Tribune publisher David Hiller to lead the Times as publisher a month ago and has tapped Trib managing editor Jim O’Shea to head the Times as editor beginning Monday.
The Tribune board put the conglom on the block earlier this year, and then last week, after initial bids were too low, announced that it would entertain bids for its individual assets. That was seen to be an opening for wealthy individuals like Broad, Burkle and Geffen to make a play for the Times.
A Tribune rep did not respond to a request for comment.
Broad and Burkle follow at least three other groups who have made a bid for Tribune. Equity groups, including the trio of Madison Dearborn Partners, Providence Equity and Apollo Management; Texas Pacific Group and Thomas H. Lee Partners; and Carlyle Group submitted bids last month.
While it’s unclear how much Broad and Burkle are offering, those groups valued Tribune close to its current stock price of $32.48, which would translate to a total pricetag of $7.8 billion as well as the assumption of $5.3 billion in debt currently on Tribune’s books.
Some observers think the Tribune board’s decision to open bidding for individual assets is a ploy to raise the pricetag on the entire company.
Richard Riordan, a close friend of Broad’s, does not expect Broad and Burkle to keep all of the Tribune assets if their bid is successful. The Los Angeles Times, which is the most valuable Tribune asset, could still be their main target.
Riordan, who does not know the details of the bid, said he expects the duo to “buy the whole thing and then sell off pieces.”