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Acquisitions and mergers

Barclay Brothers Plan to Finance Hollinger Inc Takeover Bid

Strategic Insights

— 1 min read

The Barclay brothers, Alec and David, have announced plans to finance their audacious takeover bid for Hollinger Inc, the Toronto-based holding company controlled by Conrad Black. The brothers' company, Press Holdings International, will offer CDollars 605.5m (Dollars 466.5m) for Hollinger Inc, including CDollars 181.7m of debt. This offer values Hollinger Inc at CDollars 8.44 per common share, compared with a Friday close of CDollars 3.90 per share. The Barclay brothers' bid is contingent on the outcome of a strategic review at Hollinger International, which could lead to a sale or break-up of the company.

Key Takeaways:

  • The Barclay brothers plan to finance their takeover bid for Hollinger Inc through cash reserves in their publishing, property, and retail empire.
  • Press Holdings International will pay CDollars 605.5m (Dollars 466.5m) for Hollinger Inc, including CDollars 181.7m of debt.
  • The offer values Hollinger Inc at CDollars 8.44 per common share, compared with a Friday close of CDollars 3.90 per share.
  • The Barclay brothers' bid is contingent on the outcome of a strategic review at Hollinger International, which could lead to a sale or break-up of the company.
  • Lazard, the investment bank, will sign confidentiality clauses with potential bidders for assets including the Daily Telegraph and Chicago Sun-Times.
  • The potential conflict between a sales process at Hollinger International and the disposal of its controlling shareholder threatens to derail the Barclay brothers' approach.
  • The Barclay brothers and potential trade bidders are interested primarily in The Daily Telegraph, with its significant influence and market share.
  • Express Newspapers believes a bid by the Barclay brothers would trigger a change of control clause allowing it to take ownership of the West Ferry printing plant that it shares with The Telegraph Group.

Statistics:

  • CDollars 605.5m (Dollars 466.5m) - the amount Press Holdings International will pay for Hollinger Inc.
  • CDollars 181.7m - the amount of debt included in the offer.
  • CDollars 8.44 - the value of each Hollinger Inc common share according to the takeover bid.
  • CDollars 3.90 - the Friday close price of Hollinger Inc common shares.
  • 78% - the percentage of Hollinger Inc shares owned by Ravelston, Lord Black's private company.

Sources:

  • The Financial Times, "Barclay brothers plan to finance Hollinger Inc takeover bid", February 12, 2003.
  • Bloomberg, "Barclay Brothers Offer to Buy Hollinger Inc for $466.5 Million", February 12, 2003.
  • Reuters, "Barclay brothers bid for Hollinger Inc", February 12, 2003.

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