Competition heats up for ownership of Freedom

By Bernard J. Wolfson and Mary Ann Milbourn

IRVINE, Calif. — A family buyout offer for Freedom Communications Inc., parent of the Clovis News Journal, faces competition from several non-media investor groups among the 26 bids received late last month, according to a memo to shareholders this week.
The memo, from a committee of board members overseeing the bidding process, said several “highly credible” financial investors have offered to fund a buyout of shareholders who want to cash out. Some of those offers may be “more attractive” than a plan being promoted by a group of shareholders that hopes to retain control of the family-owned company, the memo said.
The committee said it would invite the investment firms with competitive bids to meet with shareholders and take a closer look at Irvine, California-based Freedom.
After deciding to solicit bids in March, the company sent its financial book to 58 interested parties and received 26 offers in the first round of bidding, which ended June 26. Those offers, for all or parts of Freedom, came from media companies that own newspapers or television stations and from private investment firms whose interest is purely financial.
The list of bidders, whose identities were not disclosed, has been pared down since the first round ended. Many media companies are believed to be interested in Freedom, but only two have openly said so: Gannett Co. Inc., publisher of USA Today, and Lee Enterprises, which owns 44 small community newspapers around the country.
Freedom’s management will begin making presentations next week to those who made the first cut, said Alan Bell, Freedom’s CEO.
Freedom, which owns 28 daily newspapers, 37 weeklies and eight television stations, is owned by the descendants of founder Raymond C. Hoiles. The shareholders are divided between those who want to sell some or all of their shares and others who are working to keep family control of the company, known for its libertarian philosophy.
The group that wants to retain Freedom has partnered with two New York equity investors the Blackstone Group and Providence Equity Partners. Their plan is under pressure from the bids by other financial investors groups that the committee said may be more attractive.
Rick Oncken, who is married to a Hoiles granddaughter and wants to sell if the offer is right, said the outside bids would force family members who want to retain the company to raise their offer price. He said the $165- to $175-a-share he heard they offered “is not going to fly.”
Dave Hardie, a Hoiles grandson who has favored merging with another media company said, “there are a number of shareholders not aligned with the Blackstone-Providence group who are interested in partnering with one of the other (non-media) financial players.”
Freedom came into play last summer, when some family members began demanding a fair market price for their shares. The company’s board decided to solicit bids after a small majority of shareholders voted in a straw poll last February to explore a possible sale or merger. Finalists in the bidding are expected to be selected by late summer, with a vote by shareholders sometime in September.