It looks increasingly likely that the “for sale” sign on the city’s No. 2 newspaper will be coming down, according to more than one source close to the negotiations.
Chicago Sun-Times owner Hollinger International Inc., which has been talking to potential buyers for all or parts of the company, is now focused mainly on striking a deal for its London Daily Telegraph, widely considered the crown jewel in Hollinger International’s publishing empire.
“It looks like there will be a deal for the Telegraph, but not for the Chicago group,” said a source close to the negotiations, who cautioned that nothing was final.
Blame it on a lack of significant interest in the tabloid paper from individual buyers and a substantial tax liability if the Chicago group is sold separately from the rest of the company.
In addition, selling only the Telegraph doesn’t require a full shareholder vote, keeping former Chief Executive Conrad Black, still the majority shareholder, from voting against a deal for one part of the company.
Thus, selling only the Telegraph would also end up being a key strategic move on the part of Hollinger International in the board’s legal tangle with Black.
Black was forced out of the company in November after accusations surfaced suggesting that he and other executives allegedly took millions of dollars in payments that were never authorized by the board.
Earlier this year, Black tried to maneuver a sale of his controlling stake in Hollinger International after promising a special committee investigating the company that he would not disrupt a company-backed process to look into a sale of all or parts of the assets. But a Delaware court blocked his planned sale, and Hollinger International proceeded with its own process.
Hollinger International has sued Black, former Sun-Times Publisher David Radler and other executives for $1.25 billion, saying they should pay back hundreds of millions of dollars in excessive fees and payments that were never authorized by the board.
A decision not to sell its Chicago properties would essentially leave Hollinger International with the Sun-Times, the Daily Southtown, the Post-Tribune in northwest Indiana and more than 100 community newspapers surrounding the city.
Whether Hollinger International would eventually try to find a buyer for the Chicago operation is not clear. But insiders say that interim Chief Executive Gordon Paris’ dealmaker background as managing director of New York-based private investment bank Berenson & Co. suggests that the chances Hollinger International would remain a lone entity in the long term are slim.
It is not clear if the company would also keep the Jerusalem Post, which is also on the block.
A Hollinger International spokeswoman couldn’t be reached for comment about the strategic process late Wednesday.
At least three potential bidders, including Rev. Jesse Jackson’s son Yusef Jackson, sat through presentations on the Chicago properties last month.
Separately, Hollinger International said that the special committee’s investigation into the activities of its board of directors continues.
Hollinger International’s largest outside shareholder, Tweedy, Browne Co., fired off a letter to the special committee and to Richard C. Breeden, former chairman of the Securities and Exchange Commission, earlier this week, complaining that an amended lawsuit filed by the company against Black and other executives didn’t go far enough to include board members who approved many of the controversial fees.
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In response, a Hollinger International spokeswoman told the Tribune: “While the special committee has made substantial progress in fulfilling its mandate, there are still several matters that need to be addressed, including the performance of the company’s board of directors. We said from the outset that this would be an important element of the special committee’s work, and this continues to be the case.”
Lacy promoted at Meredith: Stephen M. Lacy, Meredith Corp.’s president of publishing, was named president and chief operating officer of the media company Wednesday. Lacy, 50, will oversee all of the company’s business operations, including magazines and broadcast television. Lacy was also elected a member of the board.
He continues to report to Chairman and CEO William T. Kerr.
The publisher of Better Homes and Gardens and other magazines also named John H. Griffin, Meredith’s magazine group president, to succeed Lacy as publishing group president.
On the move: Larry Deutsch, formerly with Upshot/Equity Marketing, joins the Chicago office of 141 Worldwide as executive vice president, engagement partner.
`Early Show’ comes to Chicago: CBS will broadcast the network “Early Show” from Navy Pier on May 21. Harry Smith (a native of south suburban Lansing) and Dave Price (formerly with WBBM-Ch. 2) will host the broadcast, which will air on Channel 2 from 6 a.m. to 8 a.m.