It appears that the sale of the Chicago Cubs by the Tribune Co. is going to take longer to complete as the exclusive negotiating window for Thomas Ricketts has now closed.
According to Reuters, the bidding has reopened for rival bidder Marc Utay, a managing partner with New York-based private equity firm Clarion Capital Partners LLC, and his partner Leo Hindery. The Utay/Hindrey group, along with Chicago real estate executive Hersh Klaff of Clarion Capital were the final three bidders along with Ricketts in late January of this year. Ricketts was selected out of the three on January 22 which allowed him to enter into a 30-day exclusive window to try and reach a purchase agreement. That window has long since passed.
At the time Thomas Ricketts, the chief executive of Chicago investment bank Incapital LLC and the son of the founder of TD Ameritrade Holding Corp (AMTD: O), bid was said to be lower than Utay’s bid, but was selected due the structure of Ricketts’ offer and how that married up with the difficult credit markets. Ricketts, at the time, offered $900 million for the Chicago Cubs, Wrigley Field, and a 25 percent stake in Comcast SportsNet Chicago.
Ricketts’ $900 million was being pulled back by as much as $40-$50 million based upon Tribune paying below market rate on for media rights to the Tribune held outlets WGN-TV, WGN Radio, and Comcast SportsNet Chicago. The addition of Utay in the mix may be designed Tribune nudge Ricketts forward. As reported by Reuters:
Tribune Co and its banker, JP Morgan, have entered into formal talks with the Utay/Hindery group and a deal could be reached late next week, a third source said.
However, others said the re-emergence of the Utay/Hindery group, which finished just shy of the Ricketts' offer in January, also could be Tribune Co's way to pressure Ricketts into settling on terms desired by the media company. Two sources described the sides as on the verge of a deal.
"That's just a way to keep the fire on the Ricketts," the first source said. "The Ricketts have never been closer to getting a deal done."
Ricketts has reportedly lined up the needed financing, with the gap appearing to be the $40-$50 million that he wishes to take off the $900 million initial offer.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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