Peter G. White Management Limited

April 24, 2007 19:16 ET

Peter G. White Management Limited Provides Background to the Annual General Meeting of Hollinger Inc.


CANMORE, ALBERTA--(CCNMatthews - April 24, 2007) - Peter G. White Management Limited -

1) Hollinger Inc. has fixed the date of Monday, May 7, 2007 for its Annual General Meeting of shareholders. The company's management proxy circular proposes the re-election of the current board of directors, and the appointment of Wesley Voorheis as CEO. In this connection, Hollinger shareholders and other interested parties should be aware of the following facts.

2) Two members of the current board, Mr. Voorheis and Newton Glassman, strongly opposed the privatization of Hollinger two years ago as representatives of Catalyst Fund General Partner I Inc. The proposed privatization, which was recommended by the staff of the Ontario Securities Commission, and supported by 87% of the minority shareholders who voted, as well as by the 78% controlling shareholder (the Ravelston Corporation Limited), offered minority shareholders $7.60 a share plus a fully-funded litigation trust available to any shareholder. Nevertheless, a panel of OSC Commissioners refused to allow the privatization to proceed.

3) In the two years since the OSC rejected the privatization proposal, and under the management of the current board of directors, Hollinger's share price has declined to some 38 cents.

4) During the same period, the board has permitted Hollinger to spend $70 million of its dwindling cash, and has failed to exercise any influence on Sun-Times Media Group (formerly Hollinger International), Hollinger Inc.'s subsidiary and only significant asset, while presiding over the destruction of 95% of Hollinger's shareholder value.

5) Meanwhile, the formerly profitable Chicago Sun-Times has become chronically unprofitable; 11 of the past 14 quarters have been unprofitable, although the company has no debt and substantial cash. More than 20% of the paid circulation of the Sun-Times has been lost. Shareholders' equity has declined by over $500 million, and about one billion dollars of market value has disappeared (60% of the historic maximum), while CEO Gordon Paris received $17,000 a day, or $13 million over three years.

6) In April 2005, as a result of the OSC's refusal to allow the privatization of Hollinger, Ravelston was put into court-supervised receivership. RSM Richter was appointed receiver-monitor of Ravelston, with the obligation to conserve and protect its assets in the interests of all stakeholders. Ravelston's major asset is its controlling interest in Hollinger Inc.

7) No apparent effort has been made to curtail the cost of the court-ordered inspection of Hollinger instigated by Mr. Glassman/Catalyst, which has cost some $23 million to date without producing any identified useful result.

8) On March 8, 2007, Wesley Voorheis on behalf of Hollinger Inc. apparently sent a letter and settlement proposal to Cyrus Freidheim, CEO of Sun-Times Media Group (STMG) in Chicago. The proposal offered to surrender Hollinger Inc.'s multiple voting rights (rights that give Hollinger 70.1 % voting control of STMG; this voting control is Hollinger Inc.'s most valuable asset), in exchange for the forgiveness of a loan. Hollinger Inc. also proposed to co-operate with STMG to wind up and to distribute the estates of Ravelston and its subsidiaries.

9) On April 10, 2007, Hollinger issued a press release stating: "In early March 2007, Hollinger took the initiative and presented Sun-Times Media with a comprehensive proposal to resolve all matters of disagreement between them. Sun-Times Media Group has rejected that proposal. Attempts by Hollinger to continue a productive dialogue toward such a resolution are ongoing." The details of the March 8, 2007 proposal were not disclosed in this Press Release. A subsequent proposal to sell Hollinger Inc. to Sun-Times has similarly failed.

10) The current management of Hollinger has not exercised or attempted to exercise any real control over its subsidiary, STMG as the assets of that company have dissipated. Rather, Hollinger is apparently engaged in an exercise to liquidate its corporate parent, Ravelston.

Contact Information

  • Peter G. White Management Limited
    (403) 609-4025