Hollinger International turned to a Delaware court for help yesterday to scupper a controversial bid for control of the publishing group by the Barclay brothers of the UK.
The legal move marks a further escalation in the stand-off between Hollinger and former chairman and controlling shareholder Conrad Black, who supports the Barclays' $466.5 million (€374.2 million) bid for control of Hollinger.
The publishing group behind the Telegraph titles in the UK and the Chicago Sun-Times yesterday filed a wide-ranging lawsuit in Delaware that includes a demand for a preliminary injunction to prevent Lord Black from consummating the deal.
A special board committee that was created to review the Barclays' bid also unanimously approved a new shareholder rights plan, or poison pill, to hamper further the Barclays' ability to complete a deal.
If triggered, the poison pill would give all Hollinger shareholders, except for Lord Black or any of his affiliates, the right to buy Hollinger stock at a 50 per cent discount. The plan would be triggered if a person or group acquired a 20 per cent voting share of Hollinger without the approval of the company's board of directors.
Lord Black agreed this month to sell Hollinger Incorporated, a cash-strapped Canadian holding firm he controls, to the Barclays. The deal would transfer control of Hollinger International from Lord Black to the reclusive entrepreneurs because Hollinger Inc holds a 73 per cent voting and 30 per cent equity stake in the US-listed group.
