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Wall Street bigwig Merrill Lynch has been tasked with conducting the possible auction of Tribune Co., owner of Newsday and the Los Angeles Times, according to people familiar with the matter.
Merrill has been the longtime banker of Tribune - having worked on nearly $15 billion in transactions for the media company since 1998, according to data provider Capital IQ.
Late Thursday night, Tribune agreed to explore selling assets or a leveraged buyout of the entire company in order to juice up its sputtering stock price. The company has been under pressure from its largest shareholder, the Chandler family, for several months.
Credit ratings agencies Fitch and Standard & Poor's downgraded $3.1 billion of Tribune's debt to junk status yesterday in anticipation of some sort of leveraged transaction.
Tribune has also reached an agreement with the Chandlers to unwind the two complex partnerships, which hold Tribune shares and real estate used by the company's newspapers. After failing to reach an agreement over those partnerships, the Chandler family in June publicly blasted Tribune chief Dennis FitzSimons' performance and pushed for a breakup of the company.
Several individuals based on the West Coast, including supermarket kingpin Ron Burkle and music mogul David Geffen, have expressed interest in buying the Los Angeles Times. Tribune's shares jumped $1.94, or 6 percent, to $33.99 yesterday.
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