Black still has the power to wreck deal

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The Independent Online

The sale of the Telegraph group could be heading back to the courts after Lord Black of Crossharbour threatened to scupper the deal.

The sale of the Telegraph group could be heading back to the courts after Lord Black of Crossharbour threatened to scupper the deal.

The disgraced Conservative peer, who was chairman of Hollinger International until he was ousted in November, said shareholders must be given a say on the £665m sale of the Telegraph papers agreed on Tuesday night. Lord Black controls 30 per cent of the shares in Hollinger International but as a result of owning special shares, he wields 72 per cent of the voting rights. If it were put to a shareholder vote, he could block the deal.

Legal experts believe that Lord Black is using the issue to try to put pressure on Hollinger International. He wants to force it to pay him his share of the sale proceeds and to drop a $1.25bn lawsuit that accuses him of using the company's money as a "cash cow".

One lawyer close to the process said: "This threat to the deal is the only leverage Black has with Hollinger International. If I were him, I would do as much as I could to use this to cut some sort of deal."

It is thought that Hollinger will resist this tactic. Insiders said the company was confident it would beat Lord Black in court over the issue. A Hollinger source said: "You're not going to give a guy money if you think he owes you $1.25bn."

The ability of Lord Black to contest the outcome of the Telegraph auction rests on a vaguely worded article in Delaware law that says that shareholder approval must be sought for a company transaction that involves "all or substantially all" of its assets. Hollinger International owns other newspapers. The company will argue that the Telegraph does not constitute "substantially all" its assets.

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