Monday, October 30, 2006

Plenty To See Here

Plenty continues to happen on the Tribune Company breakup story. In a far reaching article, the LA Times tells us that not many people want to buy the Tribune. And those that do, don't want to pay a lot.

Investment firms appeared to have only lukewarm interest in buying Tribune Co. in its entirety as of a Friday deadline for initial offers, increasing the chances that the media company would be broken up and sold as pieces.

But the real news for Cubs fans comes from this section of the article.

The muted response could mean a sale at little premium or it could force the special committee of directors reviewing offers to conduct a second round, this time soliciting bids for Tribune's 11 daily newspapers, 25 television stations and other holdings, which include the Chicago Cubs baseball team and stakes in the online job-search service CareerBuilder and television's Food Network.

Investment experts observing the deal doubted that an outside buyer would keep Tribune intact.

"No one will buy this and keep it whole," said one executive at a private equity firm that is among the bidders.

"They'll do the dirty work of selling off the pieces that the board doesn't want to do."

The "dirty work" means things like the Cubs. If Tribune Company CEO Denis FitzSimons doesn't want to sell the Food Network, CareerBuilder and the Cubs, then some raider will buy the Trib stock in the low 30’s (and take out the Chandlers at a small premium), and then sell the pieces to try to realize the $42 to $46 valuation that some believe the Trib has locked in its balance sheet.

This has truly been a fascinating story with case studies to be created on finance, public relations, and shareholder relations. It's like following a player from the minors up to the majors. You first get wind that there's something interesting happening. You follow the news to see how things progress. Along the way there are happenings that give you signs of future direction. With a Felix Pie it's a 2 homer game. With the Trib, it's a downgrade of their debt rating and a shareholder revolt.

There's always been activity around this story and not it seems to be coming to a conclusion. Too bad. It's been more entertaining, and actually more active and fluid, than the Cubs have been since 2004.

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