Merger talks between MediaNews and OC Register break down

A disagreement over price has stalled merger talks between MediaNews Group and the Orange County Register. MediaNews, which owns nine newspapers in Southern California, had put together a financed deal to buy the Orange County newspaper, but Register owner Freedom Communications wants a better offer for its flagship property, the Wall Street Journal reports.

Freedom owns eight television stations and more than 100 daily and weekly papers, according to the Journal. It's probable MediaNews only wants the newspapers - and possibly only the Register - and that could mean Freedom wants more time to negotiate better deals for the remainder of its assets.

It's also possible bids from Platinum Equity, which owns the San Diego Union-Tribune, or Los Angeles Times-owner Tribune Co., might have given Freedom a new sense of its value. However, regulatory hurdles stand in the way of any merger with these companies.

From the Journal:

A March deadline for bids on Freedom's assets came and went before the unsuccessful discussions with MediaNews. Freedom is now in talks with other possible buyers, the people said. 

-snip- 

People familiar with Freedom's finances said the company's newspapers could fetch about $350 million, or roughly four times their earnings before interest, taxes, depreciation and amortization. Freedom's television stations could be worth about $400 million, or about eight times such earnings, these people said. 

Those figures fail to take into account corporate overhead expenses, and pension and tax liabilities, said some people familiar with the negotiations.