Will anyone listen to new controller?
What won what where
The parent of the OC Register had planned to buy out two private equity firms - Blackstone Group and Providence Equity Partners - that held a combined 45 percent stake in the company. But the $500-million deal has been postponed, according to the WSJ, apparently because of the credit crunch (not to mention the not-so-terrific state of the newspaper industry). The Journal reports that Freedom was all set to get financing from GE Capital and others, but some of the potential lenders got cold feet. Plus, the Hoiles family, which controls the majority stake in Freedom, would have been faced with higher borrowing costs. Here’s how Blackstone and Providence were brought in:
In the end, rejecting a higher offer from industry rivals Gannett Co. and Media News Group Inc., Freedom agreed to sell a minority stake to the two private-equity firms. Using the money invested by the firms -- more than $450 million -- as well as borrowings, Freedom bought out some or all of many family members' stock. Freedom's debt, which was estimated at $350 million before the buyout, rose to nearly $1 billion afterward. Since then, Freedom has paid down some of the debt, opening the way for the company to consider buying out Providence and Blackstone. The two firms have the right to sell their stake back to Freedom by May 2009, setting a deadline for when some sort of deal must be negotiated.