Freedom Comm. Shareholders Mull Options
LOS ANGELES (AP) _ Shareholders of Freedom Communications will be asked next month to consider selling the family owned media company, one of four options the board of directors is offering to raise money for older shareholders.
Other options discussed by Freedom’s board of directors this week include a merger, taking the company public by selling stock, and a series of management-led options including partial sale, Freedom Chief Executive Officer Alan Bell said.
In February, family members will be asked to cast nonbinding votes on the options, Bell said Tuesday. The board is likely to make a recommendation in March, with a final decision expected at the company’s annual shareholder meeting in April, he said.
``There was broad consensus and appreciation that we have to bring this to a conclusion quickly,″ Bell said. ``It’s not healthy for the people who work for the company; it’s not good for our business. We can’t let it linger.″
The youngest descendants of Freedom founder R.C. Hoiles are working on a plan to allow other family members to sell shares in the privately held company. Some older members have been disappointed in Freedom’s financial performance.
Company directors this week received a report on financial options that was prepared for a special committee of independent directors _ those not part of the Hoiles family _ by Morgan Stanley.
The desire of third-generation family members to cash in their shares came to a head last year after the company posted disappointing financial results. Under pressure to improve returns, the board ousted chief executive Samuel Wolgemuth, who was replaced by Bell.
In 2001, the company lost $110 million before taxes because of losses in Internet and magazine operations. But Freedom bounced back with pretax profits of $26 million in the first half of 2002, compared with a loss of $55 million a year earlier, the Register reported last week.
Irvine, Calif.-based Freedom is one of the last family owned media companies in the country. It owns 28 daily newspapers, including the flagship The Orange Country Register, 37 weeklies and eight television stations.