Register puches for higher profits. (Media & Technology).

Freedom Communications Inc., the embattled holding company of the Orange County Register, has set higher profit goals for 2003 after turning in a "middle of the pack" performance in 2002.

Financial figures shared by Chairman David Threshie with family shareholders in a Jan. 15 letter obtained by the Business Journal suggest a company that likely would sell for at least $1.7 billion.

Besides calling for higher profit, Threshie's letter alluded to other developments that reflect the growing turmoil among the company's 80 shareholders, heirs of founder R.C. Hoiles.

Threshie, widely believed to favor keeping the company in family hands, reported that the board had increased dividends and raised directors' pay. The dividend hikes, totaling 7 percent, appear aimed at mollifying shareholders who want higher payouts.

The letter also alluded to the latest volley from dissident shareholders led by director David Hardie who want Threshie replaced with a non-family director because of performance issues.

A faction led by Hardie and Tim Hoiles has been agitating for Freedom to solicit bids from would-be buyers, a call that has alarmed those who fear a sale would mark the end of Freedom's libertarian editorial voice.

On Feb. 11, investment banking firm Morgan Stanley will present to Freedom's shareholders its assessment of four "liquidity options"--an outright sale; a merger with another media company; an initial public offering; or a combination of borrowing and asset sales that would allow some family members to cash out and others to maintain ownership.

Included in the last option is possible transfer of control to the fourth generation of heirs from the third generation that includes Threshie, Hoiles and Hardie. Shareholders are slated to express their preferences in a non-binding vote due by Feb. 25.

"What usually happens when a company gets into this kind of family turmoil, it winds up getting sold," said media analyst John Morton. "But here you have an ideological component that might interfere, so who knows?"