updated 2/7/2007 11:51:40 AM ET 2007-02-07T16:51:40

Billionaire investor Sam Zell has approached Tribune Co. with a proposal that could lead to a bid for the media conglomerate, according to a published report Wednesday.

The Chicago Tribune, citing several unidentified sources close to the matter, said the Chicago real estate mogul is in preliminary talks with Tribune on a complicated proposal that may include taking an equity stake in the company while adding debt to fund a large dividend for shareholders.

The report came as Zell's Equity Office Properties Trust is concluding a bidding war that has driven its stock to double the share price of 15 months ago, adding some $11 billion to its market capitalization.

The newspaper cited one source as saying Zell has spoken with Tribune's second-largest shareholder, McCormick Tribune Foundation, about his interest in trying to structure a deal for the company. The foundation is run by current and former Tribune Co. executives, including former Chairman and CEO John Madigan and current Chairman and CEO Dennis FitzSimons.

Details of Zell's proposal were not available, the Tribune report said.

Representatives for Zell and Tribune Co. declined comment Wednesday when asked about the report. A McCormick Tribune Foundation spokeswoman did not immediately return a telephone message.

Tribune has been examining its strategic options since last September when, under pressure because of a long-slumping stock price, it appointed a special board committee to review prospective offers for the company. The company says its board of directors intends to decide by the end of March on a plan to increase shareholder value.

The Tribune report cited unidentified people close to the process as saying that the three offers submitted by the company's January deadline have failed to gain traction with the board committee. Those offers were made by the Chandler family, Los Angeles billionaires Ron Burkle and Eli Broad, and The Carlyle Group, a private equity firm based in Washington, D.C.

The committee is expected to meet again next week to consider its options.

One potential course of action being discussed on Wall Street is for Tribune management to devise its own plan to pay shareholders a large dividend without adding to its already significant debt burden. That might entail bringing in an outside investor or private-equity firm for financial backing.

Tribune owns 11 newspapers, including the Chicago Tribune and the Los Angeles Times, along with 23 television stations and the Chicago Cubs baseball team.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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