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LORD BLACK of Crossharbour’s call for a shareholder vote on the sale of The Daily Telegraph was undermined yesterday when it emerged that he claimed a few months ago that a vote was not required.
The peer’s change of heart was revealed in previously confidential documents, released by a court in Delaware, which date back to his failed attempt to sell a controlling stake in Hollinger International, publisher of the Telegraph, to the Barclay brothers.
The documents cover key parts of the secret negotiations between Lord Black and Sir David and Sir Frederick Barclay at the turn of the year. The documents show that the Barclays were worried that Hollinger International — whose board was outside Lord Black’s control — might be able to sell The Daily Telegraph from under them.
Lord Black’s deal with the Barclays was struck down by a Delaware court in February. Since then, however, the Barclays have gone on to win an auction of the Telegraph last month with a bid of £665 million.
In correspondence dated November 22 last year, Lord Black wrote to Sir David Barclay after having consulted his lawyers. Lord Black wrote: “The sale of the Telegraph out of Hollinger International would probably not, in itself, trigger a shareholders’ vote.”
Lord Black goes on to reassure the Barclays about their hold on the newspapers after the sale of the group: “I assume that you would move at once to assert your control over the board and it will be impossible to sell the Telegraph or any important asset.”
Lord Black repeated the point on January 20, days after his private deal with the Barclays became public. In a handwritten note to Sir David and Sir Frederick, the peer said: “The only method (available to Hollinger International) of blocking our deal we can see is to try to sell the Telegraph separately.” He signed off with: “Please call me anytime. I hope you are feeling better, David.”
Now Lord Black wants the right to vote on the sale of the Telegraph, which could give him the power to block the deal. A hearing has been set for July 23, just days before the planned sale to the Barclays is completed on July 30.
It is understood that Lord Black now justifies his change of stance by reference to the high £665 million price that the Telegraph fetched at auction. Under Delaware law, a shareholder vote is required only if “all or substantially all” of a company’s assets are being sold. Lord Black believes that the test is met because £665 million is a high proportion of Hollinger’s $2 billion enterprise value.
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