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Billionaire Pair Mull Next Tribune Move

Ron Burkle and Eli Broad are looking for another way to win the publishing giant.
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With Chicago real estate magnate Sam Zell celebrating his deal with



, California billionaires Ron Burkle and Eli Broad are down -- but don't count them out.

A source familiar with the negotiations told

late Tuesday that Burkle and Broad are still evaluating the deal with their advisers and exploring ways to make another go at the publishing giant.

If the pair come forward with another bid that's more generous to shareholders than Zell's offer, a marathon auction process for the nation's second-largest newspaper publisher that began last summer could be extended yet again.

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The agreement announced by Tribune on Monday to accept Zell's bid is still subject to shareholder approval, and until a vote is taken, the company is free to entertain other offers. That opens the door to a final push from Burkle and Broad, and the $25 million fee promised to Zell in the event of a breakup is a relatively small hurdle in a deal this large.

At this point, the winning offer is valued at $8.2 billion, or $34 a share, and Zell has pledged an investment totaling $315 million. The transaction, which will take place in two separate phases, is expected to be finished in the fourth quarter. Afterward, Tribune's employees will own a majority stake in the company's equity under an employee stock ownership plan, or ESOP.

Zell, who will take over as Tribune chairman, will have a warrant that can be exercised at any time to acquire a 40% equity stake for $500 million.

Burkle and Broad reportedly came forward in the final days of negotiations last week and offered to match Zell's bid using the tax-friendly ESOP structure, but lacking details, Tribune's board opted to accept Zell's leading bid over the weekend.

Zell's purchase price marks a 16% premium to where the stock opened in June 2006, just before the company's largest shareholder, the Chandler Family Trust, went public with complaints about the company's strategy. After a long and convoluted auction that was widely viewed as a disappointment along the way, the outcome has won support from weary shareholders.

But originally, the Chandlers had called for a sale, arguing that a private-equity buyer would acquire Tribune for at least $35 a share, so there may still be room for a dark-horse bid to garner favor on Wall Street.

At this point, Tribune's board may be eager to close the book on an already chaotic sale process, but Burkle and Broad are free to give it one last try if they still see an opportunity at the company.

A spokesman for Tribune and representatives for Burkle couldn't be reached for comment; a representative for Broad was reached but declined comment.

Shares of Tribune closed down 13 cents, or 0.4%, to $32.68 on Tuesday.