The parent company of the Orange County Register has pushed back plans to buy out two private equity investors that took a sizable stake in the family-controlled company in 2004, according to the Wall Street Journal.
Irvine-based Freedom Communications Inc., which owns the Register, other papers, magazines and TV stations, was planning to spend more than $500 million to buy out Blackstone Group LP and Providence Equity Partners Inc., according to the journal.
Blackstone and Providence own about 45% of Freedom.
The deal has been put off because of the credit crunch, according to the journal.
Freedom had planned to borrow from General Electric Co.’s GE Capital and other lenders, the story said. Financing was nearly completed a few weeks ago before some banks got nervous about lending to Freedom, amid a downturn in daily newspapers.
The company also faced the prospect of higher borrowing costs, according to the journal.
That led members of Freedom’s founding Hoiles family to put off a buyback until the market calms, according to the report.
Talks could resume soon, sources told the journal.
The private equity firms have the right to sell back their stakes by May 2009.
Returning Freedom to full family ownership is a goal of Chief Executive Scott Flanders, who came to the company in 2005.
The sale to the private equity firms ended feuding among descendants of founder R.C. Hoiles by allowing them to cash out their stakes.
Freedom opted for private equity investors, instead of selling to bigger newspaper companies, because it allowed family members to retain a 51% voting stake.
