David Geffen, the music industry mogul turned founder of Dreamworks SKG film studio, is among three West Coast billionaires to have made bids for the Los Angeles Times, one of the most influential newspapers in the US.
News of the emergence of serious bidders for the paper will ratchet up pressure on its owner, the Tribune Group, where rebel shareholders are pushing for the media company to be broken up.
Mr Geffen has been told by Tribune's chief executive, Dennis FitzSimons, that he will not currently enter negotiations on a sale, but he held out the possibility that this stance may change. Some Wall Street estimates suggest the LA Times could fetch up to $3bn.
It is understood that three dissident board members representing the LA Times' former owners, the Chandler family, have been soliciting deals for many of Tribune's assets, and analysts are expecting another boardroom showdown over the company's future.
"At this time we are not prepared to discuss the possible transaction described in your letter," Mr FitzSimons told suitors in a letter. "If our perspective changes we will contact you."
LA Times is the jewel in the Tribune media empire, which also includes the Chicago Tribune newspaper and 26 television stations. It is the fourth most widely distributed newspaper in the US.
When the Times was purchased by Chicago-based Tribune in 2000, it ended 116 years of control by the Chandler family, but the family has three seats on the board and, with 12 pre cent, is the company's largest shareholder. They have seen the value of their holdings slide by more than a quarter, and have publicly criticized management for strategic failures. They voted against a $2bn share buy-back plan, calling instead for the company to sell itself or some assets to unlock value.
Rumours of Mr Geffen's interest in buying the Times have been circulating on the Los Angeles party circuit since last summer. He is one of three billionaires to have formally requested talks, along with Eli Broad, an LA property investor, and Ron Burkle, a supermarket magnate.
Mr Geffen made his estimated $4.5bn fortune over 20 years as a record label boss in the Seventies and Eighties. Dreamworks, the Hollywood studio he founded in 1994 with Steven Spielberg and Jeffrey Katzenberg, was split in half last year, with the live action studios sold to Viacom for $1.6bn, while the animation business, which produced Shrek, stays with Mr Geffen and his partners.Reuse content