Hollinger International rebuffs Barclays' $1.4bn approach

By Saeed Shah
Thursday 29 January 2004 01:00

The Barclay brothers have made an unsuccessful approach to buy the whole of Hollinger International, in an attempt to end the legal battle for control of the newspaper publisher.

Sir Frederick Barclay and Sir David Barclay said in a SEC filing they offered Hollinger International $18 a share on Sunday to buy out the 70 per cent of the company's equity not covered by their existing deal with Lord Black of Crossharbour.

The brothers said Hollinger International rebuffed the approach, saying it was not "interested in discussing such a transaction at this price".

However, Hollinger International last night said "no offer or proposal was ever made". In a statement, the company also said: "Sir Frederick indicated tentatively that he was considering a price of $18 per share to buy out the shareholders but would need to discuss this his brother. No offer or proposal was ever made. In a subsequent conversation, Sir Frederick indicated he was no longer considering the $18 price."

The proposed bid would have cost the Barclays $1.1bn and valued the entire equity of Hollinger International at $1.4bn. The deal would have been at a slight premium to the price agreed with Lord Black, the company's former chairman, for his 30 per cent holding, which comes with 70 per cent of the voting rights in Hollinger International.

The approach was made to Hollinger International's "senior financial adviser", thought to be Lazard, the bank charged with selling off the company's individual newspapers.

It is possible that the Barclays will go hostile and put the offer direct to shareholders. They had already unsuccessfully approached investors including Tweedy Browne, the leading institutional shareholder, with offers to buy their shares.

The price the Barclays were willing to offer Hollinger shareholders may be considered fair value by independent analysts. For instance, Jan Loeb at Jefferies, a brokerage, earlier this month said his "near-term buyout price target" was between $17 and $18 a share.

It emerged in a separate filing that Sir David originally offered to buy Lord Black out of his company in May 2003. The two sides finally agreed a deal this month at $17.50 a share.

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