Disgraced newspaper baron Lord Conrad Black has launched his legal bid to block the £665 million sale of the Daily Telegraph and its sister publications to the Barclay brothers.
Lord Black’s Hollinger Inc announced last night that it had filed a complaint with a Delaware court demanding a shareholder vote that would effectively give it power of veto over the sale of the titles.
Despite being removed as chairman and chief executive of Hollinger International last year, Black is still the company’s most powerful shareholder, controlling around 18% of its ordinary equity and 68% of its voting shares through his holding firm Hollinger Inc.
The company said in a statement yesterday: “We do not believe that Hollinger International should be allowed to disenfranchise shareholders and deny them their fundamental legal rights. The UK assets of the company represent the substantial majority of its value and the sale of those assets therefore requires shareholder approval.”
It added that Hollinger Inc had not made a final decision as to the desirability of the sale of the titles to the Barclay brothers because it had not been provided with all of the necessary information including details of the transaction, possible alternatives and future plans for the company.
Leo Strine, the Delaware judge who has been overseeing the ongoing legal disputes, recently indicated that he was inclined to grant a shareholder vote on the sale. He said: “There’s a reality here that can’t be escaped. Hollinger Inc controls a majority voting block of Hollinger International.”
Lord Black’s legal action means that the future of the Telegraph titles is effectively hanging in the balance. If Black wins his case, the entire bidding process may have to begin again because he would effectively have a veto over any buyer.
Yesterday, Lord Black’s share in Hollinger International, dropped from 30% to 18.2% yesterday, following a refinancing of the cash-strapped holding company, Hollinger Incorporated.
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