Burkle, Broad lodge complaint with Tribune

Real estate mogul Sam Zell’s jump to the head of the pack in the auction for Tribune Co. has led Los Angeles billionaires Ron Burkle and Eli Broad to protest that their earlier offer was given short shrift.

The partners said in a letter to Tribune over the weekend that they should have been given access to the same information that helped Zell draft an offer that relied on forming a new employee stock ownership plan in an attempt to acquire the media company in a tax-efficient manner.

The letter appears to be a first step toward rejuvenating their January bid, which could be revised this week, according to a person familiar with the auction, who is not authorized to speak publicly about details.

Zell’s $33-a-share bid offers a premium of more than 8% over Friday’s closing price for the company, which owns 11 daily newspapers, 23 television stations and the Chicago Cubs baseball team. The Los Angeles Times and KTLA Channel 5 are among Tribune’s properties.

The bid gave the Chicago-based Zell a slight advantage in his attempt to acquire the company, although a person familiar with the process said last week that a committee of Tribune directors in charge of the auction could still take an alternate route.

One frequently discussed option would be for Tribune to reorganize itself, forming separate television and newspaper companies and borrowing to pay a large dividend.

Broad and Burkle have said that a driving force behind their interest in the company is the desire to return The Times to local ownership and ensure that it is maintained as a quality newspaper for Southern California.

The two billionaires were said to believe their proposal, which also would have reorganized the company and paid a large dividend, was not given serious consideration by Tribune.

A person who saw their letter to the company said it noted that the duo planned to invest $500 million, while Zell initially proposed a $300-million equity investment.

Tribune set a deadline of March 31 -- this Saturday -- for concluding the review of strategic alternatives. But another person familiar with the review, also unauthorized to speak publicly, said there was a chance the process would be extended because of the complicated negotiations.

james.rainey@latimes.com