A New York-based distressed buyout firm that has acquired a stake in Irvine-based Freedom Communications Inc. is making a bid for part of another media company, the parent of the Los Angeles Times.
Chicago-based Tribune Co. has struck an agreement with creditors that would give control of the bankrupt company to Angelo, Gordon & Co. and others, according to a report in the Chicago Times.
JPMorgan Chase & Co. also would be a major owner of Tribune, which runs the Los Angeles Times.
Angelo Gordon is the same distressed private equity firm that has surfaced in the bankruptcy reorganization of Freedom, parent of the Orange County Register.
During Freedom’s bankruptcy, Angelo Gordon acquired debt of the company that is being converted to an ownership stake.
Sources familiar with the situation said Angelo Gordon has a sizable stake in Freedom that’s less than a majority.
An ownership link between Tribune and Freedom could raise the prospect of closer ties between the Register and the Los Angeles Times—once bitter rivals that have moved closer in recent years.
Both papers now share some advertising and circulation-related operations. Editorial operations have remained independent.
Tribune’s reorganization plan is expected to formally be filed with court officials shortly. A hearing is scheduled for Tuesday, according to the Tribune report.
Adding Tribune would represent an expansion of Angelo Gordon’s move to buy shares in bankrupt news companies.
Besides Freedom, which operates 33 newspapers and eight television stations, Angelo Gordon has been buying stakes in other distressed newspaper companies, including the Philadelphia Inquirer and the Philadelphia Daily News.
A federal appeals court last month put a crimp in Angelo Gordon’s effort to buy the Philadelphia papers out of bankruptcy with a ruling favoring local owners currently in control. The firm is appealing the ruling.
In Orange County, Angelo Gordon struck a deal last month to buy Santa Ana’s Griffin Towers office complex from Los Angeles-based Maguire Properties Inc.
Along with Dallas-based Lincoln Property Co., Angelo Gordon reportedly is buying the two 14-story buildings for a combined $90 million.
The buildings were valued at $200 million when Maguire refinanced the property in 2008.
Freedom filed for bankruptcy in September after trying to strike a deal to appease creditors holding about $1 billion in debt.
Most of the debt was incurred in a 2004 buyout by private equity firms Blackstone Group LP and Providence Equity Partners LLC that kept members of Freedom’s founding Hoiles family in control.
As part of the company’s reorganization, secured debt holders—including investment banks as well as Angelo Gordon—are taking over ownership in exchange for forgiving about $445 million in debt.
