Lord Black, the chairman of Hollinger International, has signalled his intention to sell a minority stake in the company, but played down talk of financial crisis at the newspaper group.
Last month, Hollinger, whose interests include the Telegraph Group, cut its full year income forecasts in the wake of disappointing second quarter results. The company has been hit by a drop in advertising revenue and has come under fire from investors, led by Tweedy Browne (see
Financial Probe Impacts On Hollinger Profits).
In yesterday’s Sunday Times, Black said that he was in talks with various private equity firms, including Providence Equity Partners and Bain Capital, about buying a shareholding.
The proceeds would be used to address debts and buy out Hollinger investors with retractable shares. These shareholders have already rejected a scheme under which they would have received a higher dividend in return for a deferment of redemption (see Shareholders Reject Hollinger Proposals).
Black said: “There is a bottleneck at Hollinger Inc and it is time to clean the place up. We are putting together an absolutely comprehensive package. And we are going through a final offer selection.”
At the end of last year, Black was forced to exchange Hollinger’s bank debt for bond debt at a much higher interest rate. However, he remains committed to the business and claims to have neither the need nor inclination to relinquish control of the Telegraph Group.
