Bids Due in Auction of Newspaper Firm
Final bids were due today for all or part of Irvine-based Freedom Communications Inc., the nation’s 12th-largest newspaper company and publisher of the Orange County Register.
The auction, which closes at 5 p.m., culminates more than a year of maneuvering over a possible sale by factions of a famously fractious family descended from Raymond C. “R.C.” Hoiles, who bought the Register for $750,000 in 1935 and turned it into a megaphone for his Libertarian philosophy.
The company, owned by 86 family members, has 7,000 employees, 28 daily papers, 37 weeklies and eight television stations. Estimates of its value are in the $2-billion range.
It was possible that at least eight bids would be submitted, according to sources close to the auction.
Likely bidders include giant newspaper companies such as McLean, Va.-based Gannett Co., which publishes 100 daily papers including USA Today, and Denver-based MediaNews Group Inc., whose 47 newspapers include eight in Southern California. Officials at Gannett and MediaNews acknowledged their interest in Freedom but declined to talk about their offers.
A number of well-known private buyout firms also were putting offers together.
Some were bidding for Freedom in its entirety, others for parts of the company. Still others offered to invest enough to allow some family members to retain majority ownership and control of editorial-page policies while buying out others, said Alan J. Bell, Freedom’s chief executive.
A special committee of six non-family board members will meet with financial and legal advisors in the coming days and present the best offers to the full 12-member board Oct. 1. Shareholders are to vote in early November on which offer, if any, to accept.
One family faction is led by R.C. Hoiles’ grandson Timothy C. Hoiles, who has lobbied for years to sell his 8.6% stake in the business. Tim Hoiles contends Freedom was poorly run, at least until Bell became CEO last year, and has long since abandoned its founder’s strident views. His father, Harry W. Hoiles, fought a long and unsuccessful legal battle to break up the company during the 1980s.
Another faction that includes company Chairman R. David Threshie Jr. and Richard A. Wallace, vice president of corporate affairs -- both married to granddaughters of R.C. Hoiles -- has refused to entertain any buyout offers.
A third group, led by Thomas W. Bassett, a great-grandson of the founder, has attempted to work out a compromise.
Bassett’s group has allied itself with the private equity firms Blackstone Group and Providence Equity Partners in a bid to buy out Tim Hoiles and others who want out. Sources close to the deal said that like the other private-equity bids, it would lead to the sale of many company assets but would offer the remaining family members a shot at buying back the entire company at a later date.
The shareholders have met various bidders previously during show-and-tell sessions in Orange County and Dallas. And the bidders’ staffs have been working for months to get information from Freedom -- sometimes box loads at a time, Bell said -- and tailor proposals that run hundreds of pages long.
That process intensified last week, leaving many staffers at Freedom’s headquarters with bleary eyes trying to keep up with the demands, Bell said Friday.
“Now we’re at the point where the big bosses are making the calls,” he said, describing two- and three-hour conference calls with a dozen or more people, including the bidders, their lawyers, tax experts, consultants and other advisors.
