By: Lucia Moses
Company Looks To Increase Stock Value
Hollinger International Inc. announced today that it is putting its community
newspapers on the block and seeking merger or affiliation partners for its metro
papers in a bid to increase its stock value.
The Toronto-based company publishes 77 dailies, including the Chicago Sun-Times,
The Jerusalem Post, Ottawa Citizen, and National Post in Canada, and 302
non-dailies. Hollinger said it plans to retain control of the Telegraph in the
United Kingdom, most of its metropolitan newspaper assets in North America, and
their respective Internet assets.
In a statement, Chairman and CEO Conrad M. Black said that while the company’s
stock hasn’t markedly under-performed its industry peers, the value has been
obscured by the perceived complexity of its corporate structure, start-up costs
related to the National Post and the Internet, and tax issues.
‘This is particularly timely as most recent concerns about the long-term viability
of the newspaper industry and its ability to adapt profitably to the Internet seems
largely to have subsided,’ he said in the statement.
‘Hollinger International Inc. expects to emerge from this process with a
significantly reduced debt level and a smaller number of outstanding shares, a
stronger strategic position in relation to other media (and especially new media)
and appreciably higher earnings per share,’ Black said.
Hollinger retained Morgan Stanley Dean Witter to advise the company in the process.
The company said proceeds from sales will be used to reduce debt and buy back shares
and possibly distribute them to shareholders.
The company said as its quarterly earnings report, due out Thursday, will show,
newspapers are performing ‘very well and their profitability should easily exceed
recent expectations for the current year.’
Lucia Moses (firstname.lastname@example.org) is an associate editor
for Editor & Publisher magazine.
(c) Copyright 2000, Editor & Publisher