Lord Conrad Black has pulled out of funding negotiations with a number of private equity groups, he confirmed Monday. News of his exit triggered a spate of nervous tics among investors, concerned that Black's businesses might run out of cash in the foreseeable future.
Discussions were centred on a substantial injection of funds into Black's cash-strapped holding company, Hollinger Incorporated, parent of international newspaper publisher Hollinger International whose stable includes Britain's Daily Telegraph, Sunday Telegraph; the Chicago Sun-Times in the US; and the Jerusalem Post in Israel.
This is the second occasion on which Black has pulled the plug on talks with a potential funder. An earlier deal with Southeastern Asset Management, Hollinger Inc's largest institutional investor, looked set for inking but SAM's insistence that the peer cede a degree of control is said to have torpedoed agreement. At the time Black claimed to have received more attractive offers from private groups.
Despite hightailing it Monday from the cash stash, Black insists Hollinger's refinancing remains on course. "As of about two weeks ago, most of the private equity groups . . . ceased to be the most interesting potential investors with us, for a variety of competitive commercial reasons," he claimed in an email to the Financial Times, adding the curiously Delphic postscript that an announcement was "finally imminent".
Despite Black's bullishness, there is another reason for investor disquiet. Last week, US ratings agency Moody's Investors Services announced it was reviewing its credit rating for Hollinger, citing as a reason "questionable corporate governance practices" [WAMN: 03-Nov-03].
According to Black-watchers, it is increasingly unlikely that any funder will agree to his Lordship retaining command of Hollinger. The FT quotes one such observer: "Will any deal allow him to keep control of the company? Hell, no!"
Data sourced from: Financial Times; additional content by WARC staff