Two investors launch a bid for Tribune

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Efforts to reshape the ownership structure of the US newspaper industry intensified on Wednesday when two private investors joined to launch a bid for the Tribune Company while the New York Times Company faced a fresh challenge from a frustrated shareholder.

The Tribune bid came from Eli Broad, a real estate magnate and philanthropist, and Ron Burkle, who built his fortune in the supermarket industry.

Both men - and David Geffen, the entertainment mogul - had previously signalled interest in acquiring Tribune group’s Los Angeles Times, and returning it to local and private ownership.

Their bid for the entire company, which includes 10 other papers, 24 TV stations and the Chicago Cubs baseball team, could inject life into an auction process that has drawn only lukewarm interest from a range of private equity investors.

People familiar with the matter described the combined Burkle-Broad bid as “competitive”, although they declined to specify its size or whether it exceeded Tribune’s market capitalisation of $7.7bn.

The bid was revealed a day after Dean Baquet was forced to resign as editor of the Los Angeles Times for refusing demands for further job cuts. That tension has led observers to question whether the Times and other newspapers would fare better as private companies.

However, Morgan Stanley Investment Management has taken a different view, and was on Wednesday ratcheting up its efforts to loosen the Sulzberger family’s grip on the New York Times Company.

In a letter to the company, the fund manager asked its board to add a resolution to its proxy in favour of ending its dual-class share structure, which has allowed the Sulzbergers to preserve their control of the Times company since they took it public in 1969.

Morgan Stanley took aim at Arthur Sulzberger Jr, asking that his posts as chairman of the Times company and publisher of the New York Times be held by separate executives.

“We continue to believe that a declassification of the share structure of the New York Times Company will foster a culture of accountability that will ultimately benefit the New York Times newspaper and all shareholders,” wrote Hassan Elmasry, managing director of Morgan Stanley Investment Management.

The New York Times Company said it would “evaluate” Mr Elmasry’s proposal.

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