At Kirby McInerney, we have a long history of activity in the corporate governance arena. In connection with the Kohlberg Kravis Roberts & Co. takeover of RJR Nabisco in 1988 that inspired "Barbarians at the Gate", our firm established that investment bankers advising target boards have duties running directly to target shareholders. This led to a substantial recovery for the target shareholders.
Hollinger is a recently celebrated corporate governance initiative. In the Spring 2003, Hollinger’s principal shareholder, Tweedy Browne, engaged KM to eliminate what was referred to as the Black Discount. That required the removal of Conrad Black, a process we set in motion by a series of sophisticated, little-employed maneuvers in Delaware, home to many corporations and oracle of corporate law.
Tweedy Browne had approximately thirteen million shares of the company trading at substantially less than $10 at the time of our engagement. After it became clear that Mr. Black would no longer control Hollinger, the stock rose from less than $10 to in excess of $20 per share, an increase of more than $100 million in Tweedy’s holdings.