'Telegraph' fears Black may attempt to stymie sell-off

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The Independent Online

Hollinger International's planned sale of The Daily Telegraph could provoke a new tussle with Lord Black of Crossharbour, the company's former chairman, over who gets the money.

Hollinger International's planned sale of The Daily Telegraph could provoke a new tussle with Lord Black of Crossharbour, the company's former chairman, over who gets the money.

Industry sources said that Hollinger International, which is at war with Lord Black, would seek to withhold the cash raised from the divestment of the Telegraph titles from the group's former chairman. The company is suing Lord Black for $1.2bn (£653m) for alleged embezzlement and "racketeering".

As the sale of the Telegraph moves into its final phase both sides are working up their positions on where any proceeds will end up. Sources close to Lord Black said that it is possible to argue the sale of Hollinger's UK titles - The Daily Telegraph, The Sunday Telegraph and The Spectator magazine - is such a substantial part of group assets that it requires shareholder approval.

Hollinger, which disputes the need for consent, plans to return the funds from the divestment to investors, though it has never said how this will be accomplished. Lord Black owns or controls about one-third of the company's equity. However, Hollinger is thought to want to put Lord Black's share in an escrow account, pending the outcome of the legal battles between the company and the Tory peer.

It is believed that unless Hollinger undertakes to distribute the money raised from the sale to all shareholders, Lord Black would push for an investor vote on the transaction and seek to block it.

The issue, which is likely to end up in the courts, would hinge on how significant the UK papers are to the group. Lord Black is likely to point out that the amount raised from the Telegraph - likely to exceed £600m - is more than half the money offered for the company's other papers.

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