Whole of Hollinger open to bidders

INVESTMENT bank Lazard has restarted the auction for the Daily Telegraph stable of newspapers. It is now seeking bids for the entire parent group, Hollinger International, as well as the individual titles.

This follows a decision last Thursday by a court in Delaware, US, which blocked Lord Black from passing the Telegraph titles to the Barclay brothers in a £260 million deal by selling them his stake in Hollinger Inc.

Black's company, Hollinger Inc, owns 30% of Hollinger International, but controls 70% of the votes. This super-voting structure would not pass to another owner if Hollinger International was sold.

Black is understood to be unlikely to appeal against the verdict of the court, which said he had 'breached his fiduciary and contractual duties'. He has now thrown his support behind the sale process organised by Lazard.

Hollinger International also owns the Chicago Sun-Times, the Jersusalem Post and a range of smaller newspapers.

Bidders who entered the first round of the auction for the Telegraph titles are now expected to reconsider their offers as most are interested only in owning the Telegraph or the Chicago Sun-Times.

Any UK-based bidder would probably need an American partner to make a bid for the entire group which, if successful, would result in the British titles going to UK-based operations and the American titles to US firms. Lazard now believes the tax liabilities that Hollinger could incur from selling assets individually would be greater than the premium it could command by selling prize titles like the Telegraph separately.

Bids for the Telegraph are thought to range from £500 million to £600 million. The whole of Hollinger International was worth about $1.63 billion (£900 million) when the New York Stock Exchange closed on Friday. Potential bidders are thought to include venture capital groups Apax, 3i and Candover; the Daily Mail & General Trust, publisher of The Mail on Sunday, which was working with venture capital firm Cinven and the Berry family, the Telegraph's previous owners; and Richard Desmond, publisher of the Daily Express.