Broker in cash bid for Telegraph

OUTSPOKEN stockbroker Terry Smith confirmed he is masterminding a cash bid to buy the Telegraph newspaper group from its parent, Hollinger International.

Smith, chief executive of Collins Stewart Tullett, has put in an offer that is likely to value the group at £400m to £500m. Analysts said his bid would be unlikely to face opposition from competition regulators.

The maverick broker, who made his name in the early Nineties through his blunt criticisms of profit flattering accounting practices, aims to bring together a group of big investors to put up the funds for the group, which includes the Daily and Sunday Telegraphs and the Spectator magazine.

He would then rapidly float it on the Alternative Investment Market, using his purchases earlier this year of Northumbrian Water and Center Parcs as a template.

Collins Stewart, down 5p at 420p, could earn millions of pounds of 'origination fees' from a deal, but does not normally take stakes in the companies itself.

Hollinger International is in the midst of a US investigation into payments to executives including former chief executive Lord (Conrad) Black.