Tribune Co. board directors weighed yesterday a revised buyout offer from California billionaires Eli Broad and Ron Burkle against that of rival billionaire Samuel Zell under the pressure of today's self-imposed deadline for an announcement of future actions.
The impending end of the six-month auction, together with a last-minute bidding war among the billionaires, sent Tribune's stock higher, to close at $32.11 for a gain of 58 cents, or nearly 2 percent, from Thursday.
Tribune, based in Chicago, owns The Sun, the Los Angeles Times and other newspapers and TV stations.
Sources familiar with the process said directors would meet again today.
"This isn't easy for them because none of the offers is without a lot of risk," said one source. "All of them would load up the company with huge debts, which it may or may not be able to pay down. Tribune could collapse under any of these proposals," a source said.
The Broad-Burkle team enlivened the sleepy auction Thursday night by challenging Zell, who appeared to have won over skeptical directors.
The duo, following Zell's lead, incorporated an employee stock ownership plan in their bid, according to sources familiar with the offers. Broad and Burkle also promised to give shareholders $34 a share, $1 above Zell's bid, and contribute $500 million compared with his $300 million, the sources said.
However, the debt level involved in the Broad-Burkle proposal wasn't known. Their earlier bid in January called for $10.8 billion in borrowing. Zell's proposal entails $12.7 billion.
Tribune responded to the revised Broad-Burkle offer at 5 p.m. yesterday with a series of questions, according to a source familiar with the matter. Replies were sent by early evening, the source added.
Stock analyst Craig Huber of Lehman Brothers warned against saddling Tribune with unsustainable debts, saying any transaction required more than $1 billion in cash - far more than either Zell or Broad-Burkle are contemplating.
Asked whether Zell would put forward a counter bid, his spokeswoman declined to comment, as did a Broad representative. Spokesmen for Tribune and Burkle did not return calls.