Conrad Black Sues To Prevent Sale Of Telegraph

by Robin Pilgrim, LawAndTax-News.com, London

05 July 2004

Former head of the Daily Telegraph, Conrad Black on Thursday filed suit in Delaware's Chancery Court in order to prevent Hollinger International, from which he was removed as chief executive last November, from selling the newspaper and its sister publications to the Barclay brothers without his approval.

Canadian-born Lord Black was removed as CEO of Hollinger International following the discovery of unauthorised payments made to himself and other board members. However, the 18.2% of shares owned by his holding company, Hollinger Inc., in Hollinger International are of a special kind, meaning that he in fact retains a controlling stake in Hollinger International, with 68% of the votes.

In a statement released on Thursday, Hollinger Inc. announced that:

"We do not believe that Hollinger International should be allowed to disenfranchise shareholders and deny them their fundamental legal rights. The UK assets of the company represent the substantial majority of its value and the sale of those assets therefore requires shareholder approval."

"Hollinger Inc. has not made a final determination as to the desirability of the proposed transaction, since we have not been provided with all of the necessary information, including details regarding the transaction, possible alternatives and future plans for the company, to make such a decision."

The statement went on to add that:

"We believe, however, that all shareholders should be provided with sufficient information to evaluate the proposed transaction, to weigh it against alternative opportunities that may be available to the company and to determine whether they believe the proposed transaction represents the best way to maximize shareholder value."

Hollinger International is reported to be holding firm to its assertion that a vote on the sale is not necessary.

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