Enlarge imageBy Adam Pasick and Martha Graybow
LONDON/NEW YORK (Reuters) - Publishing magnate Conrad Black says he will sell his controlling stake in Hollinger International, the Daily Telegraph’s owner, to billionaire tycoons David and Frederick Barclay, one day after the media company sued him and removed him as chairman.
The Barclay brothers said they would launch a $326.5 million (181 million pounds) offer, plus about $140 million in debt, to buy Toronto-based Hollinger Inc.. The holding company controls about three-quarters of the voting stock of Hollinger International.
The deal signals the end of Black’s decades-long reign as an international press baron, though the pact could face hurdles amid a battle between Black and Hollinger International over millions of dollars in payments the company says he collected improperly.
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The company ousted him as chairman Saturday, and sued him and an associate for more than $200 million, accusing them of receiving unjustified compensation and altering company documents. Black has said repeatedly he is innocent of any wrongdoing.
Hollinger International, which also owns the Jerusalem Post newspaper, said in a brief statement that the company and its board "intend to review the offer for Hollinger Inc. and its implications for Hollinger International".
In a statement, Black said it would be "distressing" to part with his newspapers but that "they will be in good and caring hands and we will be able to focus exclusively on resolving current legal and public relations concerns."
The U.S. Securities and Exchange Commission, which is investigating Hollinger, declined comment. The SEC obtained a federal court order on Friday to protect the work of an internal committee at Hollinger International that is seeking to recover about $32 million in authorised payouts to Black and other top executives, even if the company changes hands.
Black owns 78 percent of Hollinger Inc. through his privately held company Ravelston, a stake he has agreed to sell to the Barclays, who operate from the tiny island of Brechou, which they own, off the northwest coast of France.
Their business empire spans a wide range of interests including London’s luxury Ritz Hotel and Littlewoods, Britain’s second-biggest mail-order business and high street store chain.
A source familiar with the matter said the SEC had no plans at the moment to interfere with the potential sale of Black’s Hollinger stake. Regulators’ main concern is to try to protect any possible new owner from dismantling the work of the special committee at Hollinger International, something the court filing on Friday will help to do, this person said.
Canadian-born Black, a member of the House of Lords, built Hollinger International into the world’s third-largest newspaper empire.
The tycoon, fascinated by Napoleon and author of a biography of Franklin D. Roosevelt, has a reputation for imperiousness with shareholders, the press and high-profile enemies such as former Canadian Prime Minister Jean Chretien.
George Jones, political editor of the right-wing Daily Telegraph, said he did not think a takeover by the Barclay brothers would affect the editorial stance of the newspaper.
"I would have thought (the Barclay brothers) are broadly of the conservative mind of businessmen," he told BBC television. "I think they will continue the political direction."
A spokesman for the Barclays said a takeover would benefit Hollinger International shareholders.
"After, let’s face it, a real period of uncertainty and concern, they think this is a very good offer, and this is actually a very good move for Hollinger International," spokesman Tim Payne told Reuters.
The spokesman said the Barclays are "willing to listen" to the recommendations of investment bank Lazard, which is carrying out a strategic review of the Hollinger International assets.
