Chicago-based Tribune Co., the owner of the Chicago Tribune, Los Angeles Times and six other daily newspapers, is interviewing bankers about selling its papers, according to two people with knowledge of the matter.
CHICAGO -- Tribune Co., the bankrupt owner of the Chicago Tribune, Los Angeles Times and six other daily newspapers, is interviewing bankers about selling its papers, according to two people with knowledge of the matter.
The company’s owners are seeking an adviser for a possible sale after Tribune Co. exits bankruptcy, which is slated to happen by Dec. 31, according to the people, who asked not to be named because the talks are private. Rupert Murdoch, chairman and chief executive officer of News Corp., plans to take a close look at Tribune Co.’s newspaper assets once they’re available, according to a person with knowledge of his thinking.
Selling some of Tribune Co.’s papers would bring an influx of cash to the company after four years of bankruptcy. The owners may hold onto the larger newspapers, such as the ones in Los Angeles and Chicago, and look to sell the smaller titles more immediately, said Reed Phillips, managing partner of investment bank DeSilva & Phillips LLC.
“They’ll look at their assets and start to monetize some of them,” said Phillips, who isn’t involved in the discussions and doesn’t have direct knowledge of the matter.
Gary Weitman, a spokesman for Chicago-based Tribune Co., declined to comment, as did Nathaniel Brown, a spokesman for News Corp. in New York.
In November, Tribune Co. won approval from the Federal Communications Commission to transfer its television and radio licenses to new owners -- including JPMorgan Chase & Co., and hedge funds Oaktree Capital Management LP and Angelo, Gordon & Co. -- the last hurdle to emerging from bankruptcy.
U.S. Bankruptcy Judge Kevin Carey accepted Tribune’s proposal to divide ownership of the newspaper and television company among its lenders in July.
Murdoch, 81, has expressed interest internally at looking at some of Tribune’s bigger-market newspapers, according to one of the people. News Corp. is splitting into two companies, with one focused on entertainment and the other on newspapers and publishing. The new publishing company, which will start off with a debt-free balance sheet, may give Murdoch more latitude to pursue newspaper acquisitions, the person said.
Tribune Co. filed for bankruptcy after billionaire real- estate developer Sam Zell orchestrated an $8.3 billion leveraged buyout of the company in 2007, just before a global recession and a slump in print advertising devastated the newspaper industry.
The buyout loaded Tribune with debt, and Zell failed to execute a turnaround of the newspapers. He put the company into bankruptcy in December 2008, triggering a court fight between bondholders who held Tribune’s pre-buyout debt and the lenders who funded the takeover. A settlement approved by the bankruptcy court allowed the older creditors to try to recover some of their losses by pursuing lawsuits against shareholders and managers, including Zell.
Tribune Co. owns eight daily newspapers, 23 television stations and stakes in more than 50 websites, including CareerBuilder.com. The company is valued at about $7 billion, including publishing, media and other assets, with $2.06 billion in cash, according to an April filing with the bankruptcy court.
The publishing group, which also includes the Baltimore Sun and Hartford Courant newspapers, is valued at about $623 million, $300 million lower than a January 2011 estimate.
“This decline in value is principally attributable to and fully consistent with continuing declines in both the publishing industry generally and at Tribune,” according to the filing.