Should You Buy It? Zell Gives Tribune an Extra

With that in mind, I'm here to answer readers' questions: Should you buy shares in Tribune? Does Tribune offer almost certain 15% upside potential over the next couple of months, or will the company's debtholders wreck a potential gain for investors?

Let's take a brief look at Tribune and its troubles. Tribune shares are struggling because its newspapers and television stations are losing eyeballs to the Internet, and advertisers are moving their spending as a result. The company said last month that May revenue fell 11.1% from the previous year to $406 million, led by double-digit declines in each of its publishing, advertising and broadcast divisions.

All of the newspaper publishers have struggled in recent years as more incremental advertising spending has moved online. And I believe that Zell, similar to Rupert Murdoch's pursuit of Dow Jones(DJ Quote) is more motivated by the power that Tribune's publishing and broadcasting platforms offer, than their current financial strengths.

This creates an opportunity for investors. Given the weak climate for newspapers in general, which certainly cannot give any Tribune executives a restful night sleep, investors would not buy shares in Tribune for the strength of its business. If Zell were not interested in the company, every investor with any sense would wisely pass it over. Fortunately, Zell is making a play for Tribune.

In the meantime, according to a research note issued by Deutsche Bank July 1, where the brokerage raised its rating on Tribune from hold to buy, Zell has already secured the financing to execute his tender offer. While the debt holders may ultimately squeeze a higher bid from Zell, there's been little regulatory resistance about the takeover, and I don't believe they'll be able to block the Tribune deal at this late stage.

With that in mind, I believe the stock is attractive to purchase at current levels, as investors are likely to approve the $34 a share offer for Tribune's remaining shares next month.