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Morgan Stanley Will Advise Freedom Bid

October 23, 2002|Corie Brown | Times Staff Writer

The board of Freedom Communications Inc., parent company of the Orange County Register, met Tuesday to approve Morgan Stanley as the investment bank to help evaluate an intra-family buyout proposal.

Morgan Stanley will work with a special committee made up of Freedom's six independent board members; a preliminary proposal is due to be presented at Freedom's Nov. 12 board meeting.

"The younger generation of shareholders is working on a proposal to buy out their elders," Freedom Chief Executive Alan Bell said. "It's a way to provide cash for the shares of those family members who want out." Merrill Lynch is the investment banker for that group, Bell said.

Freedom is privately held by 11 branches of the family descended from firm founder Raymond C. Hoiles' three children. Combined, the descendants divide $13 million to $14 million in annual dividends. Estimates of the company's worth range from $1.5 billion to more than $2 billion.

In August, Tim Hoiles, a third-generation family member, sought to cash out his family's 8.6% stake in Freedom, the 12th-largest media company in the U.S. with holdings in small-market newspapers and television stations. In the wake of that bid, members of the family's fourth generation banded together to propose a buyout package that would give them control of the company.

Last week, it was announced that the Register would eliminate 35 jobs across all departments and freeze wages next year under pressure to increase its profit margins faster than planned.

Associated Press was used in compiling this report.

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