By: Seth Sutel, AP Business Writer
(AP) Hollinger International Inc. fired back at its controlling shareholder Conrad Black on Monday, taking legal steps to block his deal to sell the company to the Barclay brothers of Britain.
Hollinger International also adopted a “poison pill” measure, a defensive tactic used in corporate takeover battles that would allow minority shareholders to take a greater stake in the company in an attempt to stop a sale.
The moves marked the latest escalation in hostilities between Black, a Canadian-born newspaper baron, and the board of directors of Hollinger International, which publishes The Daily Telegraph of London, the Chicago Sun-Times (
The company has accused Black of siphoning off millions of dollars in unauthorized fees for himself and senior associates, and is demanding that he repay the money. The company has also ousted him as chairman, though he remains on the board and retains voting control through Hollinger International’s parent company, Hollinger Inc. of Toronto.
Black has made a deal to sell his majority stake in Hollinger Inc. to the Barclay brothers of Britain, who own several newspapers and have interests in retailing. That deal, if it goes through, would allow the Barclays to assume Hollinger Inc.’s approximately 70% voting power in Hollinger International.
On Monday Hollinger International said it was suing Black in Chancery Court in Delaware to block the deal with the Barclays and to eliminate the super-voting class of shares held by the parent company should the deal be consummated. That would dilute the Barclays’ voting stake in Hollinger International from 70% to about 30%.
Hollinger International took the steps after Black moved on Friday to change the bylaws of the Canadian parent company to give him veto power over any major transaction.
The “poison pill” measure and the lawsuit were approved Monday by a committee of Hollinger International’s board made up of all directors except Black, his wife and Daniel Colson, a longtime business partner of Black’s who is seen as loyal to him.
Those members include several U.S. political dignitaries including Henry Kissinger, former defense adviser Richard Perle and former Illinois Gov. James R. Thompson.