By: E&P Staff The Hoiles family has put off a plan to buy out the private equity firms that own a 45% stake in the Orange County Register publisher, according to a report in The Wall Street Journal Thursday.
Citing unnamed "people familiar with the situation," Journal staff writers Dennis K. Berman and Martin Peers reported that Freedom had planned to spend more than $500 million to buy out the stake held by Blackstone Group LP and Providence Equity Partners.
Freedom sold the stake in 2004 as part of a deal to buy out restive family members who had been agitating for a sale. The deal allowed the family to reject aggressive offers for its newspapers from MediaNews Group Inc. and Gannett Co.
According to the Journal, Freedom had nearly sewed up this new deal, intending to borrow from General Electric Co.'s GE Capital. But the plan unraveled because of the national credit crunch that has made borrowing much more expensive. "The Hoiles family, which controls the majority stake in Freedom, decided to wait until the market calms down," the Journal reported, citing a "person familiar with the situation."
Under the 2004 deal, Blackstone and Providence have the right to sell their stake back to Freedom by May 2009.
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