Hollinger Mulls Bids; Black Refutes New Allegations

01 April 2004

In the wake of Wednesday's board meeting of Hollinger International [H-Intl] in New York, the company reveals that a whole posse of bidders will be "conducting extensive and detailed business and financial due diligence on the company and its individual assets."

H-Intl is "proceeding on an appropriate timetable to secure second round bids for all of [H-Intl] as well as individual assets. Following submissions on final bids, we will then evaluate the results and proceed in a manner which is in the best interests of shareholders."

The statement's wording implies that the process to buy the Telegraph Group -- or indeed the entire Hollinger publishing empire -- will be a prolonged affair.

No names were named, but among those thought to have bid for Hollinger in its entirety are the Daily Mail and General Trust, and the billionaire Barclay twins. But the former is almost certain to undergo an in-depth regulatory probe on competition grounds, given its ownership of mid-market UK tabloid, the Daily Mail.

The Barclays, on the other hand, are unlikely to encounter competition obstacles despite their ownership of Scottish national daily The Scotsman.

• Meantime, the activities of the turbulent peer at the centre of the Hollinger debacle, Lord Conrad Black of Crossharbour, have again hit the headlines.

According to a report in the Toronto Star, H-Intl's special committee, which uncovered the unauthorised payments that forced Black's resignation, has become aware of other potential irregularities -- this time in the purchase of newsprint. The Star says the committee is investigating a series discounts and rebates the newspaper publisher received on its printing costs.

A typically robust denial by Black followed, suggesting the latest allegations are part of a smear campaign against the former chairman.

Said a spokesman for His Lordship: "This is the latest unsubstantiated allegation emanating from the special committees process in an obvious attempt to impugn Lord Black's reputation.

"Lord Black played no role in the purchase of the newsprint at Hollinger and has no reason to believe there were any problems with Hollinger's newsprint contracts.

"Further, Lord Black believes it is past time for the special committee to provide a full and thorough report on all issues raised anonymously in the press such as the bogus allegation that company funds were used to furnish private homes or purchase a car for private use, but never substantiated."

Data sourced from: mad.co.uk; additional content by WARC staff