-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WIl15zfnkpRJ279YHM0LHDRkWmq3xHJyypLmwHokjpKLnzoxt7pU3TNYmgvZz5iV Vh1bpAMBTZeFsvmfPlLD9w== 0000950135-04-003162.txt : 20040618 0000950135-04-003162.hdr.sgml : 20040618 20040618115722 ACCESSION NUMBER: 0000950135-04-003162 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20040618 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HOLLINGER INTERNATIONAL INC CENTRAL INDEX KEY: 0000868512 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 953518892 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43563 FILM NUMBER: 04870187 BUSINESS ADDRESS: STREET 1: 401 N WABASH AVE STREET 2: STE 740 CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3123212299 MAIL ADDRESS: STREET 1: 401 NORTH WABASH AVE STREET 2: SUITE 740 CITY: CHICAGO STATE: IL ZIP: 60611 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN PUBLISHING COMPANY DATE OF NAME CHANGE: 19940204 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TWEEDY BROWNE CO LLC// CENTRAL INDEX KEY: 0000732905 IRS NUMBER: 133381587 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 350 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129160600 MAIL ADDRESS: STREET 1: 350 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: TWEEDY BROWNE CO L P DATE OF NAME CHANGE: 19950926 SC 13D/A 1 b50925tbsc13dza.txt HOLLINGER INTERNATIONAL INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Amendment No. 3)* of Tweedy, Browne Company LLC Under the Securities Exchange Act of 1934 HOLLINGER INTERNATIONAL INC. (Name of Issuer) Class A - Common Stock, Par Value $.01 per share (Title of Class of Securities) 435569108 (CUSIP Number) Christopher H. Browne 350 Park Avenue New York, New York 10022 (212) 916-0600 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) June 17, 2004 (Date of Event which Required Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [X]. Check the following box if a fee is paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act, but shall be subject to all the provisions of the Act (however, see the Notes). CUSIP No. 435569108 - -------------------------------------------------------------------------------- (1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons Tweedy, Browne Company LLC ("TBC") - -------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (See Instructions) (a)[ ] (b)[x] - -------------------------------------------------------------------------------- (3) SEC Use Only - -------------------------------------------------------------------------------- (4) Source of Funds (See Instructions) 00 - -------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items (2)(d) or 2(e) [ ] - -------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- (7) Sole Voting Power TBC has sole voting power with respect to 12,880,755 shares held in certain TBC accounts (as hereinafter defined). Additionally, certain of the members of TBC may be deemed to have sole power to vote certain shares as more fully set forth herein. Number of Shares --------------------------------------------------------- Beneficially (8) Shared Voting Power Owned by Each Reporting Person 0 shares With --------------------------------------------------------- (9) Sole Dispositive Power 0 shares, except that certain of the members of TBC may be deemed to have sole power to vote certain shares as more fully set forth herein. --------------------------------------------------------- (10) Shared Dispositive Power 12,934,030 shares held in accounts of TBC (as hereinafter defined). - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,934,030 shares - -------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [x] - -------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 18.03% - -------------------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) BD, IA & 00 - -------------------------------------------------------------------------------- PRELIMINARY NOTE This Amendment No. 3 to a Statement on Schedule 13D (the "Amendment No. 3") is being filed by Tweedy, Browne Company LLC ("TBC"), which may be deemed to be the beneficial owner in the aggregate of in excess of 5% of the Class A - Common Stock of Hollinger International Inc. This Amendment No. 3 amends an Amendment No. 2 to a Statement on Schedule 13D filed by TBC and dated July 10, 2003. However, the filing of this Amendment No. 3 should not be deemed an admission that TBC comprises a group within the meaning of Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended (the"Act"). This Amendment No. 3 relates to the Class A - Common Stock, $.01 par value (the "Common Stock"), of Hollinger International Inc. (the "Company"), which, to the best knowledge of the person filing this Schedule 13D, is a company organized under the laws of Delaware, with its principal executive offices located at 401 North Wabash Avenue, Suite 740, Chicago, Illinois 60611. This Amendment No. 3 contains information regarding shares of Common Stock that may be deemed to be beneficially owned by TBC. Such shares are held in the accounts of various customers of TBC (the "TBC Accounts") , with respect to which TBC has obtained sole or shared voting power. Other than as set forth below, to the best knowledge of TBC, there has been no material change in the information set forth in response to Items 1, 2, and 6 of the Statement, as amended. Accordingly, those Items are omitted from this Amendment No. 3. ITEM 3. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION As of the date hereof, the number of shares with respect to which TBC may be deemed to be the beneficial owner is 12,934,030 shares of Common Stock (the "TBC Shares"). The aggregate cost of the TBC Shares, including brokerage commissions, was $145,979,769.13. The TBC Shares are held in the TBC Accounts, the funds therefore coming from the funds on hand in each individual managed account. In some instances, certain TBC accounts have access to funds that may come from standard margin account borrowings from brokerage accounts maintained at Bear, Stearns Securities Corp. To date, none of the TBC accounts have utilized margin account borrowings relating to their interest in the Common Stock. It is expected that funds used by the TBC Accounts to purchase additional shares of Common Stock, if additional shares are purchased by the TBC Accounts (see Item 4 hereof), will come from the funds on hand for each individual managed account, which funds on hand at any time and from time to time may include, among others, funds borrowed pursuant to margin accounts maintained at Bear, Stearns Securities Corp. Borrowings made by certain TBC Accounts pursuant to such margin accounts are secured by margin securities owned by the respective accounts, including some of the TBC Shares. Interest on outstanding borrowings under such margin accounts ranges from 1/2% to 3 1/4% over the brokers' call rate in effect from time to time at Chase Manhattan Bank, New York, New York, depending upon the amount of outstanding borrowings at any given time. ITEM 4. PURPOSE OF TRANSACTION This serves to amend Item 4 of Schedule 13D filings made by TBC dated May 19, 2003 , June 11, 2003 and July 10, 2003. The purpose of this filing is to disclose that TBC has sent a letter (attached hereto as Exhibit 1) to the special committee of the Board of Directors of the Company. TBC's letter expresses appreciation for the work that the special committee has done to date in addressing issues raised by TBC last year and previously disclosed in TBC's prior 13D filings, namely seeking to recover the funds that TBC believes shareholders have been deprived of as the result of actions taken by former executives of the Company. The letter, however, also reiterates TBC's prior demands that the special committee pursue all parties who appear to bear responsibility, including the members of the Board of Directors serving during the time the actions of the Company's former executives took place. If no action is forthcoming, TBC will deem its original demands made on the Company's board for action to remedy the wrongful acts of the Company's former executives as having been wrongfully refused. These matters including the filing of this demand may cause or result in TBC having discussions with third parties, shareholders and management regarding one or more of the actions or transactions described in clause (a) through (j) of Item 4 of the Schedule 13D form. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the date hereof, TBC may be deemed to be the beneficial owner of an aggregate of 12,934,030 shares of Common Stock, which constitutes approximately 18.03% of the 71,700,453 shares of Common Stock which TBC believes to be the total number of shares of Common Stock outstanding. The TBC Shares are held in the TBC Accounts. Also included in the TBC Shares are 905 shares of Common Stock held in a certain TBC Account for a charitable foundation of which Christopher H. Browne is a trustee. Mr. Browne is a Member of the Management Committee of TBC. TBC disclaims that it is the beneficial owner of any of the shares of Common Stock held in the TBC Accounts. The aggregate number of shares of Common Stock with respect to which TBC could be deemed to be the beneficial owner as of the date hereof, is 12,934,030 shares, which constitutes approximately 18.03% of the 71,700,453 shares of Common Stock, which the filing person believes to be the total number of shares of Common Stock outstanding, but nothing contained herein shall be construed as an admission that TBC is the beneficial owner of any of the TBC Shares. The aggregate number of shares and percentage of Common Stock with respect to which each of the Members may be deemed to be the beneficial owner by reason of his being a member of TBC, is 12,934,030 shares, which constitutes approximately 18.03% of the 71,700,453 shares of Common Stock outstanding. Except as described herein, to the best knowledge of TBC, no person who may be deemed to comprise a group with TBC or any other person named in Item 2 of the Statement, beneficially owns any shares of Common Stock. (b) TBC has investment discretion with respect to 12,934,030 shares of Common Stock held by the TBC Accounts and has shared power to dispose or direct the disposition of all of such shares. Of these shares of Common Stock, TBC has sole power to vote or to direct the voting of 12,880,755 shares of Common Stock held in certain TBC Accounts. Each of the Members of TBC, solely by reason of their positions as such, may be deemed to have (i) shared power to dispose of or to direct the disposition of all of the shares of Common Stock held in the TBC Accounts; and (ii) sole power to vote or direct the vote of 12,880,755 shares of Common Stock held in certain TBC Accounts. (c) Transactions in Common Stock effected by TBC during the sixty-day period ended as of the date hereof are set forth below: (d)
TBC Accounts No of shares purchased No of shares sold Price per share 05/24/04 2,075 $ 18.03 05/25/04 1,055 $ 17.74 05/27/04 1,350 $ 17.69 05/27/04 950 $ 17.65 06/03/04 12,000 $ 17.59
(d) To the best knowledge of TBC, each of the persons maintaining an account with TBC has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock held in said person's TBC Account. (e) Not applicable. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS See Exhibit 1 attached hereto. SIGNATURE Tweedy, Browne Company LLC, after reasonable inquiry and to the best of its knowledge and belief, hereby certifies that the information set forth in this Amendment No. 3 is true, complete and correct. TWEEDY, BROWNE COMPANY LLC By: /s/ Christopher H. Browne ------------------------------ Christopher H. Browne Member Dated: June 18, 2004
EX-99.1 2 b50925tbexv99w1.txt LETTER TO HOLLINGER INTERNATIONAL INC. VIA FACSIMILE AND FEDERAL EXPRESS June 17, 2004 Mr. Gordon Paris The Hon. Raymond G.H. Seitz Mr. Graham W. Savage Hollinger International Inc. 712 Fifth Avenue New York, New York 10022 Gentlemen: On May 10, 2004, on behalf of my client, Tweedy, Browne Company LLC, Christopher H. Browne wrote the attached letter to you, inquiring why the special committee has not caused Hollinger International Inc. (the "Company") to file suit in federal court against those present and former outside directors of the Company, and auditors, who enabled Conrad Black and his associates to deprive the Company's shareholders of an amount you estimated to total $380.6 million. To date, Mr. Browne has not received a reply. Your failure to respond to Mr. Browne's letter, coupled with your inaction and your comments in recent months, has led us to conclude, reluctantly and tentatively, that the special committee is not committed to pursuing all responsible parties, and is not committed to recovering the full amount wrongfully diverted from the Company. I say reluctantly because we are deeply appreciative of your effort and dedication in pursuing the Strategic Process, and in pursuing Conrad Black and his associates. I say tentatively because we wish to provide you a final opportunity to demonstrate that your paramount objective is the welfare of the Company and its stockholders, and not the welfare of your colleagues on the Board of Directors. In his meetings with us, Gordon has spoken candidly of your need for allies. Certainly, the Company is served well when a majority of the Board is determined to pursue strategic objectives that are in the best interest of all stockholders. The duty of the special committee, however, is to investigate wrongdoing and pursue all the responsible parties, even if that includes the rest of the Board. Indeed, the special committee was created, and new directors were appointed, because none of the incumbent directors could properly investigate themselves. The time has come for the special committee to demonstrate its independence, and to act on the demand letters we delivered over a year ago. For example, since 2001 we have been asking how the directors permitted excessive payments to be made under the Management Services Agreements. We received a partial answer in the documents forwarded to us pursuant to our 220 demand. Your federal Complaint alleges that $203.5 million of the amounts paid pursuant to the Management Services Agreements were excessive. All of that $203.5 million was approved by the audit committee. No director exercised proper oversight. But for the conduct of the directors unnamed in the federal Complaint, the looting could not have occurred. As you surely know, Delaware law imposes personal liability on outside directors who fail to make any good faith attempt to exercise business judgment. Just a month ago, in the Emerging Communications case, Justice Jacobs of the Delaware Supreme Court found personal liability against an outside director who "consciously and intentionally disregarded" his responsibility to safeguard the minority stockholders from risk, given his knowledge that a merger was unfair, even though he received a fairness opinion from an investment bank and had been defrauded by the inside directors. The sophisticated and experienced outside directors on the Company's board had every reason to believe that the compensation paid under the Management Services Agreements was unfair. Why, then, have you not responded to our demand by suing all of the directors who compensated Black and his associates excessively without making any effort to justify the amounts they sought? Your failure to act cannot be attributed to the belief that Conrad Black and his affiliates will repay all of the $380 million they wrongfully took. Black's liquid assets are equal to roughly one quarter of that amount. Even if there is a sale by the Company of the Telegraph Companies, he still couldn't come close to reimbursing the $380 million. If the resources of Radler and others you sued are added in, $380 million is still not reached. The only way to recoup the totality is to pursue the other responsible parties -- the unnamed directors and the professional services firm who are jointly and severally liable. I understand from your counsel that the Company has $130 million in coverage under its director and officer liability policies. Of course, insurance is not the only source of funds for a recovery. According to the Forbes 400, two of the former directors, Messrs. Taubman and Wexner, each have sufficient resources to satisfy the entire amount that was looted during their term of service on the Board. In our last meeting, on May 6, 2004, just before you filed the federal Complaint, we discussed the possibility of bringing actions against the outside directors. But when I made repeated inquiries of your counsel, no satisfactory response was forthcoming. From this silence, it appears that no one is actively pursuing recourse against the outside directors, or even against their insurance carriers. In Chris Browne's letter of May 10, 2004, and in our three prior meetings with Messrs. Paris and Breeden, we made it clear that we expect the special committee to take all appropriate steps against all responsible persons to rectify the damage inflicted on the Company and its stockholders. In our meeting of August 13, 2003, Mr. Breeden characterized the Board of Directors as being willing "to let the chips fall where they may." It is past time to follow through. Once again, we urge you to take corrective action against all responsible parties. If no action is taken against the outside directors and professional services firm not named in your federal Complaint by June 28, 2004, we will deem our demands of May 19 and June 11, 2003 to have been wrongfully refused by the special committee. Sincerely yours, By: /s/ ROBERT E. CURRY, JR. ------------------------- REC/ms Attachment cc: Richard C. Breeden, Esq. Tweedy, Telephone: 212/916 0600 Browne Facsimile: 212/916 0649 Company LLC Trading Desk: 212/916 0606 www.tweedy.com 350 Park Avenue New York, NY 10022 Managing Directors Christopher H. Browne William H. Browne John D. Spears Thomas H. Shrager Robert Q.Wyckoff, Jr. 10 May 2004 Mr. Gordon Paris The Hon. Raymond G.H. Seitz Mr. Graham W. Savage Hollinger International Inc. 712 Fifth Avenue New York, New York 10022 Gentlemen: We have read the First Amended Complaint filed by you on behalf of Hollinger International Inc. against Conrad M. Black, F. David Radler and others in their employ and control. While this complaint, the result of your 10-month-long investigation, brings to light new facts damaging to the interests of all Hollinger shareholders, we are struck by your failure to name all the members of the Board of Directors at the time of these alleged misdeeds, an omission that can only be intentional. Shareholders rely on all directors to perform their fiduciary duties, not simply those held to a higher standard by their controlling stake. It is the directors who, in the words of your complaint, have the "task of protecting [Hollinger's] public shareholders." Accordingly, we write to inquire why you have chosen to omit as defendants the entire Board of Directors of Hollinger during this period, as well as the auditor, KPMG LLP, and on what basis you have deemed they share no liability for actions that you estimate deprived Hollinger shareholders of $380.6 million. In October 2001, we at Tweedy, Browne Company LLC wrote to each of the then-board members, to ask on what basis they approved payments under the Management Services Agreement your complaint alleges total $217.9 million. In May 2003, we supplemented this request with the 13-D filings about these payments, non-compete fees, and other facts that formed the basis of your inquiry. Today, some 30 months or more after our first inquiry, our original question remains unanswered. Rather, we read a complaint whose intentions appear to be at odds with the facts it discloses. Again and again and again, your complaint describes inadequacies, derelictions and fundamental failures by the members of the Hollinger board to perform even the most minimal of their duties. Some examples: - On the issue of Management Services Fees, which you allege to be excessive by $203.5 million, the complaint notes that "the only information that the audit committee generally considered in approving each year's management fee 'proposal' was: (i) the previous year's unreasonable fee; (ii) a generalized sense of the Company's size in comparison to the previous year; and (iii) a generalized sense of the work Defendant Ravelston would perform in comparison with the previous year." This clearly inadequate standard was never supplemented by further inquiry by former Illinois Governor James R. Thompson, the audit committee chairman, any other member of the audit committee, or any other board member, nor did any of these board members seek outside experts to help evaluate the validity or size of these payments. As Richard C. Breeden has noted, "compensation issues are among the most Established in 1920 Registered investment advisers/ Members of the National Association of Securities Dealers, Inc. and SIPC pivotal decisions the board is called upon to make regularly, and can quickly signal board abdication of shareholder interests." - In discussing the $54.12 million of non-compete payments generated by the CanWest transaction, the complaint states that "the audit committee and independent directors did not have the necessary information, analysis or advice by which to fully and fairly review or negotiate the payments and corporate opportunities that defendants took on the CanWest transaction" in part because of omissions and misrepresentations by the Black-Radler interests. Yet, in spite of the manifest self-interest of Black and Radler, neither the audit committee nor any of the other board members undertook any independent inquiry or sought expertise from outside the company. Rather, "the audit committee recommended ratification of the CanWest `non-compete' payments on May 14, 2001 following a 20-minute telephonic meeting. The board accepted the audit committee's recommendation after a similarly brief May 17, 2001 meeting." - In 1999, the board of Hollinger took the unusual step of permitting its top two executives, Mssrs. Black and Radler, to launch a new venture in the same industry and become significant shareholders of that venture, without full disclosure of their holdings or any additional strictures. What's more, on six subsequent occasions that your complaint alleges deprived all Hollinger shareholders of more than $56.2 million, the board accepted without any further inquiry the representations of two executives it knew to be self-interested. Again and again, "the board did not decide on its own...[to] retain independent financial or legal advisers..., negotiate any...terms, or determine whether the Company's shareholders would have been better served" by an alternative other than a sale to Black-Radler interests. - Further, in contravention to accepted practice in the venture capital industry, the board approved a compensation plan for Hollinger Digital that eventually led to the disbursement of $15.5 million to executives and directors. In particular, this scheme provided a $3.1 million bonus to Hollinger director Richard Perle between May 2000 and January 2001, a period when he was the sole non-management member of the company's executive committee of the Hollinger board. During that same period, Mr. Perle on at least two occasions enabled the Black-Radler interests to deprive other Hollinger shareholders of assets: by participating in unanimous written consents of the executive committee approving the transfer of newspapers to Horizon and a non-compete payment. - Finally, it is mystifying that the Special Committee would overlook the Company's longtime auditors, particularly when the Defendants were able to shift costs, such as private planes, onto the company's books without notice or comment. We believe that the interests of all Hollinger shareholders are best served by demanding accountability for corporate malfeasance as the courts in Delaware would: from all the directors of a corporation, not simply those bound by their controlling stake to a higher fiduciary standard. We would like to see the directors of Hollinger held to the standards articulated by Mr. Breeden in his report, "Restoring Trust:" Directors "must be willing to ask probing questions, and to exercise independent judgment on behalf of shareholders." We look forward to your response. Cordially, Christopher H. Browne, cc: Richard C. Breeden, Esq.
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