Hollinger Inc.

Hollinger Inc.

March 07, 2005 15:05 ET

CORRECTION FROM SOURCE: Hollinger Inc. Announces Revised Pricing Terms


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: HOLLINGER INC.

TSX SYMBOL: HLG.C
TSX SYMBOL: HLG.PR.B

MARCH 7, 2005 - 15:05 ET

CORRECTION FROM SOURCE: Hollinger Inc. Announces
Revised Pricing Terms

TORONTO, ONTARIO--(CCNMatthews - March 7, 2005) -

Independent Privatization Committee Proposes Shareholders Vote on
Proposed Share Consolidation and Privatization

The following corrects and replaces the release sent earlier today March
7, 2005 at 8:55 a.m. ET. The references to the conclusions of GMP
Securities Ltd. in the Valuation have been modified.

Hollinger Inc. ("Hollinger") (TSX:HLG.C)(TSX:HLG.PR.B) announced today
that its Board of Directors (the "Board") has received notification from
The Ravelston Corporation Limited ("Ravelston"), Hollinger's controlling
shareholder, that, in connection with the proposed share consolidation
going private transaction (the "Going Private Transaction") involving
Hollinger announced on October 28, 2004, Ravelston will support such
transaction on the following revised terms and conditions:

- holders of retractable common shares (the "Common Shares") of
Hollinger (other than Ravelston and certain of its affiliated entities)
would receive an aggregate of C$7.60 and the Additional Amount per Share
(as defined below), if any, in cash for each Common Share held by them;
and

- holders of Common Shares would receive a contingent cash payment right
(a "CCPR") that would entitle them to participate in their proportionate
interest in the economic benefit of certain potential claims and
litigation.

Holders of Series II Preference Shares of Hollinger would continue to
receive 0.46 of a share of Class A Common Stock of Hollinger
International Inc. ("Hollinger International") for each Series II
Preference Share held by them.

Review of Going Private Transaction by the Independent Privatization
Committee

Following receipt of Ravelston's written intention with respect to the
Going Private Transaction in October 2004, the Board established a
committee of independent directors (the "Independent Privatization
Committee"), currently comprised of Messrs. Robert J. Metcalfe and Allan
Wakefield, to consider, evaluate and make a recommendation to the Board
concerning the proposed Going Private Transaction. The Independent
Privatization Committee was further empowered to, among other things,
consider and advise the Board whether, in their opinion, the proposed
Going Private Transaction is in the best interests of Hollinger, the
holders of its Common Shares and/or the holders of its Series II
Preference Shares.

In accordance with the requirements of the applicable securities
legislation and policies concerning transactions such as the Going
Private Transaction, GMP Securities Ltd. ("GMP") was retained to provide
a formal valuation of the outstanding Common Shares (the "GMP
Valuation") under the supervision of the Independent Privatization
Committee, and the GMP Valuation was delivered by GMP to the Independent
Privatization Committee on March 6, 2005. Based upon the scope of its
review and subject to the qualifications and assumptions contained in
the GMP Valuation, GMP estimates the fair market value, as at March 1,
2005, of the outstanding Common Shares was in the range of C$7.21 to
C$7.57 per Common Share. In addition, GMP provided a formal valuation of
the outstanding Series II Preference Shares. Based upon the scope of its
review and subject to the qualifications and assumptions contained in
its valuation, it is the view of GMP that the value of the outstanding
Series II Preference Shares is equivalent to 0.46 of a share of Class A
Common Stock of Hollinger International.

On March 6, 2005, after reviewing the revised terms and conditions of
the Going Private Transaction as supported by Ravelston, the GMP
Valuation and a number of other factors, the Independent Privatization
Committee determined:

(i) to recommend to the Board that all necessary actions be taken in
order that the special resolutions to effect the Going Private
Transaction be submitted to a meeting (the "Meeting") of the holders of
Common Shares and the Series II Preference Shares of Hollinger on March
31, 2005; and

(ii) not to make any recommendation with respect to how holders of
Common Shares and Series II Preference Shares of Hollinger should vote
on the special resolutions to effect the Going Private Transaction.

No Determination Made in Respect of Going Private Transaction by the
Board at This Time

A meeting of the Board is scheduled to be held following the hearing
before Justice Colin Campbell of the Ontario Superior Court of Justice
on March 7, 2005 to formally receive the report and recommendations of
the Independent Privatization Committee, following which the Board will
make its determination in respect of the Going Private Transaction. On
February 25, 2005, the independent directors of Hollinger applied to
Justice Campbell for, among other things, advice and direction as to
whether in the circumstances the Going Private Transaction should be put
to a vote by Hollinger's shareholders before Ernst & Young Inc. delivers
its final report in connection with its inspection of related party
transactions.

The Going Private Transaction remains subject to the approval of the
Board, any order of the Court and the approvals and processes referenced
in Hollinger's October 28, 2004 press release. Subject to receipt of the
requisite approvals, formal documentation for the Meeting, including a
management proxy circular (the "Circular"), will be mailed to
shareholders of Hollinger in the near future. The Circular will describe
in greater detail information concerning the Going Private Transaction,
including a copy of the GMP Valuation, as well as set out the procedure
for shareholders of Hollinger to receive the consideration for their
Common Shares or Series II Preference Shares upon the Going Private
Transaction becoming effective.

Second Valuation and Potential Common Share Price Adjustment

Following the public release by Hollinger International of its 2004
audited annual financial statements (the "HII Statements"), an
independent valuator (the "Second Valuator") will perform a formal
valuation (the "Second Valuation") of the Common Shares. The Second
Valuation will, to the extent necessary, reflect information set out in
the HII Statements contained in Hollinger International's Form 10-K
filed with the U.S. Securities and Exchange Commission for the year
ended December 31, 2004 and update the value range (the "Updated
Valuation Range") determined for the Common Shares (the "Initial
Valuation Range") contained in the GMP Valuation. The Second Valuator
and the Second Valuation will be under the supervision and direction of
the current members of the Independent Privatization Committee.

Hollinger will publicly disclose the Updated Valuation Range via press
release following receipt of same from the Second Valuator. Each holder
of Common Shares (other than Ravelston and certain of its affiliated
entities) will receive, subject to applicable laws (including solvency
requirements), an additional amount per Common Share equal to the
amount, if any, by which the mid-point of the Updated Valuation Range
exceeds C$7.39, being the midpoint of the Initial Valuation Range (the
"Additional Amount per Share"). In no event will the Additional Amount
per Share be less than nil.

CCPRs

In order to address concerns with respect to the possible uncertainty of
value in respect of potential claims and litigation, in the event that
the Going Private Transaction is effected, holders of Common Shares
(other than holders who dissent in respect of the resolution relating to
the Going Private Transaction at the Meeting) would receive a CCPR that
would entitle them to participate in their proportionate interest in the
economic benefit of certain potential claims and litigation. Generally,
the specified claims and litigation will be claims by Hollinger against
Ravelston or Ravelston-related entities or persons arising from related
party transactions occurring prior to the effective time of the Going
Private Transaction, including transactions reported on in any final
report of Ernst & Young Inc., but excluding book debts referred to in
the GMP Valuation. The litigation will be controlled by a Litigation
Panel comprised of three of Hollinger's current independent directors.
The agreement governing the terms of the CCPRs will require approval of
the independent directors of Hollinger and the receipt of all necessary
regulatory approvals and the parties intend to seek a confirmatory order
of the Ontario Superior Court of Justice approving such agreement. The
terms and structure of the CCPRs will be described in greater detail in
the Circular.

Company Background

Hollinger's principal asset is its interest in Hollinger International
which is a newspaper publisher, the assets of which include the Chicago
Sun-Times, a large number of community newspapers in the Chicago area
and a portfolio of news media investments. Hollinger also owns a
portfolio of revenue-producing and other commercial real estate in
Canada, including its head office building located at 10 Toronto Street,
Toronto, Ontario.

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