By: Mark Fitzgerald
Conrad Black’s plan to take Hollinger Inc. private within the next 10 days — and, some say, to regain control of the Chicago Sun-Times and dozens of other newspapers — faces a critical test this week.
Today, the Ontario Securities Commission (OSC) holds the first of three sessions scheduled for the week that will examine Black’s proposal to buy all the stock of Hollinger Inc. that he does not yet hold. Hollinger Inc. has set a March 31 stockholder vote for the going-private proposal. The hearings will cover the narrow issue of whether the OSC will lift its restraining order forbidding certain Hollinger Inc. shareholders from trading their shares, a step necessary to go ahead with the privatization.
Looming over the hearings are the sweeping allegations of financial and fiduciary misconduct made last Friday by the OSC against Black, former Sun-Times Publisher F. David Radler, and former Hollinger executives John A. Boultbee and Peter Y. Atkinson. The allegation, on file on the OSC Web site, are essentially the same charges the U.S. Securities and Exchange Commission has made in its lawsuit against Black and others.
Holding company Hollinger Inc.’s principal asset is its controlling stake in Hollinger International, the publisher of the Sun-Times and other dailies and community papers in the Chicago and Canadian markets.
In a filing with the OSC, Hollinger International, which is suing Black and other former top executives for allegedly “looting” the company of some $400 million, opposes the privatization proposal. If it goes through, the Hollinger International filing states, Black will make sweeping changes in the board and bylaws of both Hollinger companies to get access to its cash and assets.
Hollinger Inc.’s board voted to go ahead with the March 31 vote, even though a court-ordered inspection of the company’s books will not be complete. Hollinger International, which wants to intervene in this week’s OSC hearings, said in its filing that the proposal is taking place amid a “fog of misinformation or non-existent information.”
The OSC should not countenance what Hollinger International characterizes as a Black’s abuse of the system, the Chicago-based company says. “Nothing less than the credibility of Ontario’s capital markets is at stake,” the filing states.