Board Supports Register’s Owners
The board of Freedom Communications Inc., parent of the Orange County Register, said Tuesday it supported a decision reached last weekend by the Hoiles family owners to transfer ownership of the company to the fourth generation of family members, now in their 20s and 30s.
But the board took no immediate action on approving any specific plan for this ownership transfer to take place. Tom Bassett, a tax attorney and fourth-generation Hoiles who proposed the generational transfer idea has said it could take six to 18 months to develop and complete such a transaction.
The 13-member board--which includes six shareholder members of the Hoiles family, six non-shareholding outside directors and Freedom Chief Executive Samuel Wolgemuth--on Tuesday directed younger Hoileses to come up with a plan and time guidelines for the best way for the company to change hands, said Tim Hoiles, a dissident shareholder who has pushed for a sale of the company.
Younger shareholders have scheduled a conference call this week with family-business expert Francois De Visscher to devise the best course. There are an estimated 30 fourth-generation Hoileses and 15 third-generation members, mostly in their 50s.
To raise funds to buy out the third generation, the family could sell shares to the public, tap private equity markets or sell parts of the business, experts said.
On Sunday, after two days of intense meetings, the family decided against selling the entire company. Despite pressure from Tim Hoiles and the looming threat of a lawsuit, the Hoiles shareholders opted not to sell out completely because such a step would probably cost the family control of its businesses. Such a sale also could end the libertarian bent of Freedom’s media holdings and potentially “have a negative impact on the continuation of various family relationships,” according to an internal Freedom document.
Tim Hoiles has supported a sale because he thinks it would bring the highest price and would allow him to cash out most profitably.
Some family members want to cash out some or all of their holdings and have been dissatisfied with their lack of liquidity.
Irvine-based Freedom owns 28 daily newspapers, 37 weeklies and eight television stations. Independent analysts have valued the company at $1.5 billion to $2 billion. The company’s prized possession, the Register, ranks as the nation’s 25th-largest newspaper by circulation.
Freedom last year had revenue of $760 million and lost about $94 million because of a tough advertising environment and the roiled economy, said sources familiar with the results.
