Hollinger Int'l. to Pay Out 'Telegraph' Cash as Dividend

By: Mark Fitzgerald Hollinger International said Thursday it will distribute to shareholders $500 million in proceeds from the sale of The Daily Telegraph of London, with the first payout a $227 million special dividend.

Hollinger said its board is also planning to distribute the remaining $273 million as a tender offer for its common shares. A final decision will be made when the company files its long-overdue financial reports for the year ended Dec. 31, 2003, with the Securities and Exchange Commission.

Hollinger, the publisher of the Chicago Sun-Times and other dailies and weeklies in the Chicago and Canadian markets, said it intends to file the annual 10-K report on or before this Dec. 31, with 10-Q reports for the first three quarters of 2004 following in the first quarter of 2005.

If the board decides not to go through with a tender offer, the second tranche may be paid out with another special dividend, the company said.

Hollinger Interim Chairman, President, and CEO Gordon A. Paris said the special dividend and the second tranche distribution is "an integral part" of the company's so-called "strategic process" of maximizing shareholder value by shedding properties in the wake of a financial scandal in which former Chairman Conrad Black and other top executives are accused of "looting" the publishing firm of $400 million in improper fees and payments.

"We believe that returning a significant portion of our remaining cash proceeds from the sale of the U.K. Newspaper Group to our shareholders appropriately addresses that stated objective," he said in a statement. "Following the special dividend and the second distribution, we will have sufficient cash to fund our operations and obligations, and to avail ourselves of strategic opportunities that would position the company for continued value creation for all of our shareholders."

Hollinger also announced Thursday the board had declared a regular quarterly dividend of 5 cents per share, to be paid January 18, 2005, to shareholders of record on January 3, 2005.