Freedom Owners to Weigh Sale Options

Feuding family members of the media empire that operates the Orange County Register are expected to meet in mid-February to discuss four proposals that could allow some or all shareholders to cash out of the Irvine-based company, which is valued at as much as $2 billion.

At meetings of the Freedom Communications Inc. board Monday and Tuesday, investment banker Morgan Stanley presented various options about the future of the privately held media company, which owns 28 daily newspapers, 37 weeklies and eight TV stations.

No decision was reached, but the directors ruled out retaining the status quo. Instead, they briefly discussed four proposals: sale of the company, a merger, an initial public offering or a “company-facilitated” proposal, which could be anything from a shareholder-developed plan to an employee stock ownership plan to a recapitalization.

“We immediately ruled out doing nothing,” said Freedom Chief Executive Alan Bell. “It’s gone on long enough, and we want to help people make choices and do it as fast as we can. We can’t let this linger.”

The board invited family members to meet in mid-February at a still-undetermined location to discuss the proposals before a vote, Bell said.

“We will spend as long as it takes to discuss each of these four broad choices,” he said. “And encourage people to make a choice.”

The shareholders -- either descendants of Raymond C. Hoiles, who founded the company in the 1930s, or those who married into the family -- recently have feuded about the media firm’s future.

In August, Tim Hoiles, the founder’s grandson and a third-generation descendant, sought to cash out his family’s 8.6% stake in Freedom, contending that mismanagement of the firm had diluted his investments. He is urging that the company be sold and has threatened to sue family members. In response, members of the family’s fourth generation, who own less than 15% of shares, banded together to propose a buyout package that would give them control.

“It’s hard to say what will happen, but if the fourth generation can get a deal together to satisfy the needs of the older shareholders maybe they can keep it with the family,” said Christa Sober, media analyst with Thomas Weisel Partners in San Francisco. “But in this world of media conglomerates, it’s getting harder for family companies to compete financially.”