Richard Desmond, owner of Express Newspapers and Lord Rothermere’s Daily Mail & General Trust could be ruled out for the race to buy the Telegraph Group amid concerns they could face investigation by competition authorities.
Both newspaper groups have shown an interest in the owner of the Telegraph titles, which is expected to be put up for sale because of financial difficulties at its parent company, Hollinger International (see
Desmond Puts Together Bid For Telegraph Titles).
Investment bank Lazards has been charged with examining strategic alternatives for Hollinger and is thought to be in the process of starting an auction for the Telegraph Group, which could be worth as much a £1 billion.
However, sources close to the bank told The Independent that any sale would have to be quick because of Hollinger’s mounting debts, which include £70 million worth of bonds that need to be repaid next year.
According to the paper, one insider said: “The bank does not want to be selling to anyone who would be caught up in Competition Commission problems.”
A Daily Mail & General Trust purchase of the Telegraph titles would give it around 26% of the UK national newspaper market, while a successful bid for Desmond would give his Express Newspapers around 20% of the market.
It is understood that media analysts are convinced that bids by Daily Mail & General Trust and Express Newspapers would face full investigation by the competition authorities, which could take up to six months with no certainty that either bid would get the go ahead.
Other interested parties understood to be circling over Hollinger’s assets include Stephen Grabiner, the former managing director of The Telegraph, and Candover, the venture capital group which used to own Regional Independent Media.
Meanwhile, Hollinger has been thrown further into crisis after all four members of its audit committee resigned following Conrad Black’s refusal to stand down as chairman. Allan Gotlieb, Douglas Bassett, Maureen Sabia and Fredrik Eaton called for Black to go as part of a package of recommendations made by the group.
Black relinquished his role as chief executive of the US-listed publisher last week following its recent admission that it filed false statements to the Securities & Exchange Commission about executive pay (see Black Leaves Troubled Hollinger As Predators Circle).
