Bids for Freedom Go Back to Panel
The board of Freedom Communications Inc. spent Wednesday considering 10 buyout and investment offers. But because of last-minute changes to several proposals, it adjourned without taking a position on the future of the family-owned company.
The decision, announced late in the day, was an anticlimax to a session that was supposed to have focused on “final bids.” Instead, the Irvine-based parent of the Orange County Register bounced the proposals back to a special committee of independent directors, who were instructed to seek clarifications from the bidders.
In a statement, Freedom said the committee, which already pondered the bids for 1 1/2 weeks, would “explore which of these proposals may be developed to the point at which it would be appropriate to submit one or more of them to the shareholders.”
The board had hoped to send one or more of the proposals to the company’s shareholders for a vote in November. Instead, no meeting date was set.
As expected, the bids were $210 to $230 per share, valuing the company at about $2 billion including its $350 million in debt. But other issues, such as voting powers and special rights of continuing family shareholders and investors, weren’t made clear, one person close to the discussions said.
At least three of the 10 proposals had been modified late Tuesday and were sent back for more work, “and there were questions on some of the other ones, too,” said the person speaking on condition of anonymity.
Freedom controls 65 newspapers, including the flagship Register, and eight television stations. The company was forced to consider selling all or part of itself after some family members complained of lackluster financial results and sought to cash out their stakes.
The company is regarded as a plum in the consolidating media industry because of its extensive holdings, and the auction attracted interest from several newspaper companies. Several leading buyout firms also were said to have submitted bids that would allow some family members to retain roles in running the company.
Some details of one bid, by William Dean Singleton’s MediaNews Group Inc., were disclosed this week in a filing with the Securities and Exchange Commission. MediaNews, which already owns or controls eight newspapers in Los Angeles and San Bernardino counties, said its offer consisted of a mix of cash and its own privately held stock, which would provide a way to buy out disgruntled shareholders while letting others stay in.
Denver-based MediaNews, which owns the Los Angeles Daily News, said that as part of its proposed deal, the Freedom TV stations would be “spun off or sold in a separate transaction at or prior to the closing.”
