Reports circulated this weekend that the Barclay brothers may be considering increasing their bid for Hollinger International, owner of the Daily Telegraph in the UK.
A potential offer of $20 per share for the 70% of shares which are publicly listed is understood to be on the cards. The Barclays current offer of $18 per share has been rejected by the Hollinger International board for not being substantial enough (see
Hollinger International Rejects Barclays’ Bid).
Hollinger International is keen to proceed with an auction of the company’s assets, which include the Chicago Sun-Times and Jerusalem Post. The continuation of an auction process is also likely to extract a higher offer from the Barclays.
The board of Hollinger International has become involved in a bitter dispute with its beleaguered former chairman, Lord Conrad Black. The Barclays’ original agreement was sealed with Black and related only to his 30% stake in Hollinger International, held in the Hollinger Inc division.
For the Hollinger International board this original deal was not particularly attractive, as more value could be extracted from the break-up and sale of the group’s individual units (although this may incur hefty tax liabilities).
Consequently, the Barclay brothers are now thought to be considering making a full takeover offer for Hollinger by taking the 70% of publicly listed shares, as well as the 30% held in Hollinger Inc. However, despite the press rumours, no formal offer has yet been made by the Barclay brothers.
