Black in offer to buy Hollinger Inc

FALLEN Press baron Lord Black is offering to buy back his holding company Hollinger Inc from minority shareholders and take the company private.

The Toronto-based firm owns 18.2% of US newspaper publisher Hollinger International, which earlier this year ousted Black as its chairman and chief executive. It still publishes the Chicago Sun-Times and Jerusalem Post and a stable of local papers.

Black, who controls 78% of Hollinger Inc's common shares through private holding company Ravelston, has not said how much he would pay in any deal to take over 100% of the firm and was evasive when reporters questioned him about the proposal in Toronto.

'The consideration to be paid to shareholders has not yet been determined and, once proposed by Ravelston, will be reviewed by a committee of independent directors, which will retain independent legal and financial advisers,' Hollinger Inc said in a statement.

A committee of three independent directors has been set up to consider Black's offer. The proposed transaction will also be subject to approval by a majority of Hollinger's minority shareholders.

Under the plan, Hollinger would finance the share buyback and is understood to have commitments for $40m(£21.7m) of notes and $16m in credit.

Some reports in Canada, quoting Hollinger Inc insiders, say Black has no plans to use his windfall from the sale of the Telegraph to finance the buyback.

Black and Hollinger International earlier this week agreed to allow Black to have a share of the proceeds of the £650m sale.

Black is accused of operating a 'corporate kleptocracy' that misappropriated hundreds of millions of dollars from the company. Black said in a statement he believed 'taking Hollinger Inc private is the best way for the company to proceed with the next stage of its development'. Sceptics say it would also be a way to rid himself of troublesome minority shareholders, some of whom are demanding he is sacked from Hollinger Inc. Those actions present the company with a further legal risk.

Shareholder Catalyst Fund General Partner I has asked an Ontario court to remove Black and four other executives along with three of the five independent directors because they failed to disclose an 'improper' $1.1m payment made by a Hollinger Inc subsidiary to Ravelston.