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Last Updated: Friday, 30 July, 2004, 00:02 GMT 01:02 UK
Bid to halt Telegraph sale fails
Conrad Black (left)
Hollinger Inc said it would appeal the latest decision
Media baron Conrad Black has failed in a bid to block the Barclay brothers' purchase of the Telegraph group.

The newspapers' parent company, Hollinger International, accepted a $1.23bn (665m) offer for the three titles in the group last month.

But a US court threw out an attempt by Hollinger Inc, the firm through which Lord BLack controls International, to delay the sale.

Hollinger Inc, of which Lord Black is chairman, is to appeal the decision.

Lord Black had argued the sale, conducted by Hollinger International and due to close on 30 July, was invalid since it had not been put to a full shareholder vote.

Hollinger Inc owns 18.2% of the shares in Hollinger International, whose assets include the Chicago Sun-Times and Jerusalem Post as well as the Telegraph newspapers.

But because some of International's shares have ten times the voting rights of others, the holding gives Hollinger Inc 68% of the votes.

Black resigned as Hollinger International's chief executive in November after an internal investigation found disputed payments made to him and others.

He has since fought the proposed sale of the Telegraph group to the Barclay brothers.

He himself had tried to sell Hollinger Inc's stake in International to the twins in February, a move blocked by the same Delaware court which has now once more decided in favour of International.

Competitive bid

In a 93 page ruling, vice-chancellor Leo Strine said Hollinger International had fully exposed the Telegraph's value to the market and received competitive bids.

He struck down Hollinger Inc's argument that the Telegraph deal would strip Hollinger International of substantially all its assets, requiring a shareholder vote under Delaware corporate law.

"Hollinger Inc's motion for a preliminary injunction motion should be denied," Mr Strine wrote.

"Put simply, after the Telegraph group is sold, Hollinger International will retain considerable assets that are capable of generating substantial cash flow."

In a statement, Hollinger Inc said it regretted that the court had decided "not to uphold the rights of Hollinger International's shareholders" to evaluate the bid themselves.

"Regardless of the outcome of this litigation, Hollinger Inc looks forward to resuming its full rights as majority shareholder of International when the court-ordered injunction terminates as anticipated," it said.

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