As leveraged buyout powers circle wounded Tribune Co., the media giant said it had changed its retirement and bonus plans to give certain employees payments if the company undergoes a change of control – a move typically made by firms before they get acquired.
Tribune, the owner of the Chicago Cubs, Newsday and The Los Angeles Times, among other media properties, has attracted the interest of at least five brand-name buyout shops.
One group including Chicago-based Madison Dearborn Partners, Providence Equity Partners and Apollo Management, is said to have the inside track because former Tribune Chief Executive John Madigan is a principal at Madison Dearborn and knows the company well.
Thomas H. Lee Partners and Texas Pacific Group have also formed a group, and The Carlyle Group, which recently hired former Time Inc. Editor-in-Chief Norman Pearlstine as an adviser, is also looking at Tribune but is said to be less serious than the other bidders, sources said.
While many Tribune investors, including the founding Chandler family and Ariel Capital, would welcome a buyout of the entire company, many see a private-equity deal as unlikely because there is no quick way to turn a profit from the deeply troubled media giant.
The most likely game plan following a leveraged buyout of Tribune, valued at roughly $13 billion including debt, is for the new owners to sell off newspapers and other assets and then take Tribune’s broadcasting unit public, according to Wall Street pros.
PAPER CHASE – TRIBUNE CO. stock chart
CLose $32.90 down 26 cents