Is private equity better than Tribune?

It's still early, but the tea leaves suggest that Tribune Co. will be hard-pressed not to sell the company, either whole or in parts, to one of the private equity groups that have been expressing interest. Private-equity is where all the money is today - almost $160 billion has entered the arena this year alone. This morning's WSJ reports that the monster Blackstone Group was increasing the size of its private-equity fund to $20 billion. And because these firms typically buy companies with mostly borrowed money - helped by attractive interest rates - they're in a great position to outbid other potential buyers. They're also operating in groups these days (otherwise known as "club deals"), and that makes their leverage even greater.

The Journal story notes that private-equity firms have paid as much as a 20 percent premium on a company's stock price. In Tribune's case, that could mean an offer of around $40 a share. That's still under historic highs, but it's hard to imagine the major shareholders - let's just say the Chandlers, for argument sake - turning down that sure thing in favor of selling off the place in parts. And Tribune doesn't seem to be wasting any time; my guess is that you'll see a deal in the next 90-120 days.

OK, so what would a private equity group do with Tribune - and more specifically, the Times?