Insurance chief Greenberg prepares bid for 'LA Times'

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The Independent Online

By Stephen Foley

in New York

Hank Greenberg, the octogenarian insurance industry giant who was forced out as chairman of AIG last year, is planning to launch a second career as a media mogul with a multi-billion dollar bid for one of the biggest newspaper groups in the US.

He has emerged as a potential buyer for Tribune Group, the owner of the Los Angeles Times, which put itself up for sale this year after a boardroom split over its future direction.

His interest in the newspaper industry may also extend to considering bids for other groups, including the owners of The Boston Globe and The Wall Street Journal. A spokesman confirmed yesterday that the 81-year-old former executive has been "exploring several options regarding media companies", adding him to a growing list of billionaire businessmen looking at acquisitions in a newspaper industry struggling to adapt to the internet age.

Other wannabe media barons include Jack Welch, the former chairman of General Electric who wants to buy The Boston Globe, and David Geffen, the music and movie industry veteran who is after the LA Times.

The emergence of a phalanx of rich businessmen offering to act as white knights to the newspaper industry comes as circulations and advertising revenues are declining, as readers increasingly search for their news on the internet, and as advertisers switch their spending to online ads. Average circulations of the US's biggest 770 papers dropped 2.8 per cent in the six months 30 September.

Tribune Group - which had a market value of $7.8bn (£4.1bn) after a 1.4 per cent rise in the share price yesterday - has assets spanning local papers, television and radio stations, and a baseball team, but it is the future of the LA Times which is attracting most interest.

The long-standing editor of the paper, Dean Baquet, stirred a national debate about the future of the struggling industry in September when he publicly defied attempts by the Chicago-based group's management to reduce the paper's editorial staff. He was ousted last week.

Two West Coast billionaires, the philanthropist Eli Broad and the supermarket investor Ronald Burkle, initially expressed an interest in buying the paper to restore local ownership and protect its editorial strength, and the pair have since teamed up to bid for the whole Tribune Group. David Geffen, the founder of Geffen Music and co-founder of the Dreamworks film studio, and a rival of Mr Broad's, wants to buy the LA Times to improve its arts coverage.

Mr Greenberg was yesterday said simply to believe that newspaper companies are undervalued assets. His 38-year reign at the insurer was ended by a scandal over accounting policies that had inflated profits by around 10 per cent.