Credit Crunch Delays Media Deal
Freedom Puts Off Plan
To Buy Back 45% Stake
From Private-Equity Firms
By Dennis K. Berman and Martin Peers
Weak credit markets have scuttled another deal, at least temporarily. Family-controlled Freedom Communications Inc., which owns the Orange County Register newspaper, has postponed a plan to buy out two minority partners, Blackstone Group LP and Providence Equity Partners.
Freedom was planning to spend more than $500 million to buy back the roughly 45% stake held by Blackstone and Providence, according to people familiar with the situation. Freedom had intended to borrow from General Electric Co. 's GE Capital and others to fund the purchase, and the deal was nearly complete a few weeks ago, those people say.
But negotiations were suspended amid the credit-market turmoil. Some banks were leery of lending money to Freedom, in part because of uncertainties facing the newspaper industry, and Freedom also faced higher borrowing costs, a person familiar with the situation said. The Hoiles family, which controls the majority stake in Freedom, decided to wait until the market calms down, this person said.
Spokesmen for Blackstone and Providence declined to comment.
In addition to the Orange County Register, Irvine, Calif.-based Freedom owns more than 30 other daily newspapers and eight television stations.