Tuesday, July 07, 2009

BREAKING: Zell's Pretty Smart

While good friend CCD over at Wax Paper Beer Cub talks some details on the Ricketts plan, Sam Zell quietly lined up a second buyer!

Tribune Co. has agreed to terms for the sale of the Chicago Cubs to a group led by private equity investor Marc Utay, giving the company two offers to submit to the bankruptcy court, two sources familiar with the sale process said on Tuesday.

On Monday, a source said the Ricketts family had agreed to terms for the purchase of the team for slightly less than the $900 million it offered in January.

One of the sources reporting the Utay group's deal said the new offer is "a higher price but less cash upfront" than the Ricketts bid.

"I don't think it's completely over yet," said the source, who asked not to be identified because the sale process is ongoing. "By the same token, Ricketts has a real edge here."

Very, very smart. One of the reasons that the court could reject the Ricketts bid is if the court determined that the value the Trib was receiving for the team was too low.

Zell has a ready answer for that. A higher bid, but with less cash up front. This makes a fascinating choice. Does the court take teh higher value, but place the debt holders at greater risk as there's actually less cash at closing to pay the debtors, or, does the court approve a plan that gives the debtors less cash on Day 1, but substantially more at day, say 1,825 (5 years).

If reader/counselor/friend theHawk is out there, would you care to comment?

The Ricketts are STILL not a lock to own the team yet!

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