New Partnership to Keep Freedom in Family Hands and Satisfy Desire by Shareholders for Liquidity
IRVINE, Calif., October 14, 2003 – Freedom Communications, Inc. today announced it has signed a definitive agreement with Blackstone Communications Partners and Providence Equity Partners to form a new partnership to recapitalize Freedom. This transaction marks the culmination of a thorough review of options for providing liquidity to certain family shareholders while at the same time allowing others to maintain their ownership in the business. Under the terms of the definitive agreement, Blackstone and Providence will make a significant investment in the firm and enable continued control by descendents of founder R. C. Hoiles, whose heritage and libertarian editorial philosophy will be preserved.
The liquidity review process, which led to today's decision, was overseen by a special committee of non-family, independent directors of Freedom Communications. Following a comprehensive review process, the Board determined that the agreed transaction is in the best interests of the Company and its shareholders. Family shareholders will shortly receive information concerning the transaction prior to a special shareholder meeting. Morgan Stanley & Co. Incorporated. and Evercore Partners, Inc. acted as financial advisors to the Special Committee and the Board. JP Morgan Chase Bank has committed to provide a substantial debt facility in support of the recapitalization.
Freedom's President and Chief Executive Officer, Alan J. Bell said, The goal from the beginning has always been fairness to everyone's objectives -- no simple task in a multi-generational family not shy to express its views! This partnership we are announcing has managed to thread the needle in a stiff wind of often noisy contention. It works for everybody. It is that rare solution to a dispute in which everyone wins -- including the 7,000 employees of the Company coast to coast who have followed every chapter of this widely discussed process. I can speak for all of our Freedom family, soon to include Blackstone and Providence, in saying this is truly a happy day.
Chairman of the Board, R. David Threshie, added, After a lengthy review, the Board has approved the Blackstone and Providence transaction. We greatly appreciate the significant efforts by the members of the Special Committee and its chairman, Robert L. Krakoff. Tim Hoiles, a Freedom Director and shareholder, said, I am thrilled with the decision the Board has made today. I believe the flexibility provided by the new investment of Blackstone and Providence gives all shareholders the choices they have been seeking. This is a great outcome for all Freedom shareholders.
Mark T. Gallogly, Senior Managing Director of Blackstone, said, We are delighted to be investing in partnership with the family and Providence and Freedom Communications. Family and corporate partnerships are the cornerstone of our approach to investing. This investment will allow the continuing family shareholders to maintain control of this important independent media company while providing fair value to all shareholders. We thank the Board, the Special Committee, family shareholders and management for their support in this transaction."
Mark Masiello, Managing Director of Providence, said, We worked productively with Freedom's Special Committee and Board and are pleased to have reached a comprehensive solution that provides Freedom shareholders an opportunity for immediate liquidity as well as continued family ownership of Freedom's operations. Freedom television assets reach many key markets and represent a unique editorial voice across the country. We look forward to partnering with management, the continuing family shareholders and Blackstone to help build value and maintain this unique voice in the communities served by Freedom.
About Freedom Communications
Freedom Communications, Inc., headquartered in Irvine, Calif., near its best known media property the Orange County Register, is a privately-owned diverse media company of newspapers, broadcast television stations and interactive media businesses. The company publishes 28 daily and 37 weekly newspapers, with a combined daily circulation of more than 1.2 million subscribers. The broadcast division includes eight stations including five CBS and three ABC network affiliates.
About The Blackstone Group
Blackstone is one of the largest and most successful private equity investment firms and over the last 15 years has invested over $7.0 billion of equity in 70 transactions. Over two-thirds of investments by Blackstone Communications Partners and Blackstone Capital Partners have been made in partnership with corporations or families. Additionally, over one-third of investments since inception have been in media and communications, including significant investments in the publishing and broadcasting sectors. The capital for this investment will be provided by Blackstone Communications Partners I L.P., which represents $2.2 billion in committed capital and is among the world communications investing and Blackstone Capital Partners IV L.P., which represents $6.5 billion in committed capital and is the largest fund of its kind ever raised. In addition to Private Equity Investing, Blackstone Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory and Restructuring and Reorganization Advisory services.
About Providence Equity Partners
Providence Equity Partners Inc. is one of the world's leading private investment firms specializing in equity investments in media and communications companies. The principals of Providence Equity manage funds with over $5.0 billion in equity commitments, including Providence Equity Partners IV, a $2.8 billion private equity fund, and have invested in more than 60 companies operating in over 20 countries since the firm's inception in 1991. Recent Providence Equity investments include Craig Media Inc., Canada's largest privately held television broadcasting company; Bresnan Broadband Holdings, LLC, which recently acquired Comcast Corporation cable television systems serving 315,000 subscribers in four Western states; the acquisition of the cable television assets of Deutsche Telekom AG; and eircom plc, the national fixed line telephone company of Ireland.