Billionaire businessman Eli Broad and supermarket magnate Ron Burkle have teamed up to submit a bid for the Tribune Co., The Associated Press has learned.
Details of the offer by the companies controlled by the two businessmen were not disclosed.
A person familiar with the offer, who was not authorized to publicly discuss it, confirmed Wednesday the bid had been submitted.
Broad and Burkle had been expected to bid for the Los Angeles Times, the Tribune’s largest property. The joint bid for the entire company came as a surprise.
Broad declined to comment on the report. A call to Burkle’s office was not immediately returned.
The bid came a day after Chicago-based Tribune Co. replaced Dean Baquet as editor of the Los Angeles Times because he refused to make mandated cost cuts at the paper.
Broad and Burkle have long said they would be interested in returning the Times to local ownership.
A third billionaire, entertainment mogul David Geffen, is known to be interested in buying the Times. A call to his office was not immediately returned.
Tribune Co. spokesman Gary Weitman declined to comment on the bid.
Tribune’s holdings include 11 daily newspapers, 25 TV stations, the Chicago Cubs baseball team, Internet ventures and sizable stakes in the Food Network and the online classified advertising venture CareerBuilder.
Along with the Times and the Chicago Tribune, the company owns Newsday in New York, The Baltimore Sun, South Florida Sun-Sentinel, Orlando Sentinel and The Hartford Courant.
Tribune tried selling the company after being pressured by discontented shareholders amid plunging circulation and a decrease in advertising revenue at its newspapers.
When bids for the mammoth media company came in far lower than expected, Tribune told prospective bidders that individual pieces were available for sale.
No major media groups bid for Tribune in the last round. Instead, the company received nonbinding preliminary offers from three investor groups.
One group consisted of Fort Worth, Texas-based Texas Pacific Group and Boston-based Thomas H. Lee Partners.
Other bids came from Boston-based Bain Capital and an alliance made up of Chicago’s Madison Dearborn Partners, New York-based Apollo Management and Rhode Island-based Providence Equity Partners.
Wall Street has had difficulty gauging the value of Tribune Co., in part because of all the uncertainties surrounding its media assets during a turbulent time for the industry.
Analyst Edward Atorino of the Benchmark Co. thinks the company could fetch about $40 a share, or roughly 25 percent above where it was trading Wednesday.
Including its more than $5 billion in debt, that would mean a price of about $15 billion.
“It’s certainly worth that, but whether they get it is something else,” Atorino said. “This is going to be a long endgame. We’ll see how it plays out.”
Shares of Tribune rose 86 cents, or 2.7 percent, to close at $32.48 on the New York Stock Exchange.
Earlier this year, McClatchy Co. paid $4 billion in cash and stock for Knight Ridder Inc., the newspaper publisher that, like Tribune, ran into trouble with investors over a slumping stock price.
Returning the Times to local ownership won’t necessarily secure jobs or lead to increased investment.
Wednesday, the Philadelphia Inquirer replaced its editor, as the private group that bought the paper from McClatchy in June said falling circulation and ad revenue would mean deep newsroom cuts.
Philadelphia Media Holdings initially said it wanted to invest in the paper to ensure its continued growth. But last month, the group said it needed to cut and renegotiate union contracts in order to meet bank obligations.