Freedom Director Quits to Protest Move to Seek Bids

An advocate of family-owned businesses and an independent member of the board of Irvine-based Freedom Communications Inc. resigned this month to protest what he called a “biased process” favoring the sale of the nation’s 12th-largest media company.

John F. Bitzer Jr., a former chief executive of Abarta Inc., a private Pittsburgh-based conglomerate that owns soft drink, newspaper, and oil and gas businesses, submitted his resignation April 3.

In his resignation letter, Bitzer cited personal issues and “deep concerns about the lack of fairness” on the part of a special board committee soliciting bids for Freedom, which owns the Orange County Register.

The extended family that closely holds the company has been at odds over the future of the company. Some want to maintain ownership while others want to cash out their holdings. Media analysts estimate that Freedom could sell for $1.5 billion to $2 billion.

Elected to Freedom’s board in 1995 because of his expertise in the dynamics of family-owned firms, Bitzer contended in the letter that it was possible to gain liquidity for the shareholders who want to sell and still maintain family ownership of part or all of the enterprise.

Freedom Chief Executive Alan Bell said that Bitzer’s comments reflected one view and that the company was comfortable with the process it had chosen.

Freedom’s special committee said that it discussed Bitzer’s resignation but that it retains “confidence in the path that has been taken.”

Bitzer could not be reached for comment. His resignation was first reported in this week’s edition of Editor & Publisher, an industry trade journal.

Freedom is one of the last remaining family-owned U.S. media empires. It owns 28 daily newspapers, 37 weeklies and eight TV stations.

The flagship Register -- the Los Angeles Times’ biggest competitor in Southern California -- has been under family control since R.C. Hoiles bought the paper in 1935.

The board decided last month to solicit bids for the sale or merger of the company after years of squabbling among Hoiles’ descendants.

Bitzer’s resignation comes ahead of the company’s annual shareholders meeting and family reunion in Orange County this weekend. Bell said that without Bitzer, the board would shrink from 13 members to 12 -- six family members and six outsiders.

Morgan Stanley, Freedom’s investment banker, is preparing a telephone-book-sized offering document that will provide potential suitors with detailed financial information about the company’s properties.

Bell expects the “book” to be completed in mid-May and distributed to those Morgan Stanley believes have the financial wherewithal to complete a deal.

“Many parties have expressed interest in part or all of the company,” Bell said. He declined to identify any suitors. Some family members also are evaluating proposals to buy all or part of the business.

Analysts have mentioned Gannett Co., Dow Jones & Co. Inc., New York Times Co., McClatchy Co. and Tribune Co., which owns The Times, as potential bidders. The companies have declined to comment.

Bell said no deal was expected before the fall.