Lord Black goes back on plans to cede control

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The Independent Online

Lord Black of Crossharbour has signalled he is backtracking on plans to cede control of his company Hollinger International, which owns the Daily and Sunday Telegraph as well as The Spectator.

Last month the Canadian-born peer said he had agreed to sell shares to US fund management group Southeastern Asset Management, so giving up his controlling position in Hollinger International. Lord Black controls the company through a complex share agreement via Hollinger Inc, a Canadian quoted company he also controls.

Last month, after pressure from Hollinger International shareholders led by New York fund manager Tweedy Browne, he agreed to set up a committee - led by former Securities and Exchange Commission chairman Richard Breeden - to investigate payments of $73m (£44m) by Hollinger International to his private company, Ravelston.

Lord Black also unveiled a deal with Southeastern, which would have seen his stake in Hollinger International cut from 73 per cent to 40 per cent. However, at the annual meeting of Hollinger Inc in Toronto last week he said this deal would not go through, although he was still talking to Southeastern.

Lord Black's office refused to discuss what the new plans might be, and Southeastern's president, O Mason Hawkins, did not return calls.

It is believed the scheme has to be amended because the shares Lord Black was to sell to Southeastern were pledged as security for a bond issue. Also there were concerns that by cutting his stake below 50 per cent, Lord Black could trigger change of control clauses on some of the group's $572m (£344m) of debt.

At the annual meeting Lord Black made a personal attack on Laura Jereski, the analyst at Tweedy Browne who has led the lobbying, saying the fund manager had a "contemptuous disregard for the facts".

Ms Jereski said her research was based on regulatory filings: "Lord Black may make entertaining comments but this is a serious issue."