American publishing giant Gannett is understood to have pulled out of the race to take control of the Daily and Sunday Telegraph as bidding enters its crucial second phase.
Gannett, which also owns the Newsquest group of regional newspapers in the UK, was tipped as a front-runner for the papers being auctioned off by Lord Black’s beleaguered newspaper group, Hollinger International.
However, reports suggest the USA Today publisher refused to increase its offer to take it through to the next stage of the auction. Sources close to Gannett say the bidding process has driven the price of the Telegraph titles to ‘crazy’ levels.
Last week Richard Desmond also made a shock decision to withdraw from the race to take control of the Daily and Sunday Telegraph after declining to increase his current bid of around £550 million by a further £50 million to be seriously considered (see Desmond Withdraws From Telegraph Race).
According to a report in the Observer, Gannett was one of around 12 parties to submit serious bids for the papers by last week’s deadline. However, it is believed its offer was one of the lowest.
Lord Rothermere’s Daily Mail & General Trust is understood to have submitted one of the highest bids at almost £700 million, in conjunction with its private equity partner Cinven. The Barclay brothers, who own the Scotsman and the Business, tabled an offer of around £670 million.
The board of Hollinger International will meet tomorrow to discuss the offers, which are being handled by its investment bank, Lazard. Other bidders include private equity houses 3i and Candover, as well as venture capital firms Apax Carlyle and Providence. Hollywood media mogul Haim Saban is also thought to have tabled an indicative offer for the titles.
Reports suggest US private equity firm KKR may have submitted a surprise £1 billion bid for the whole of Hollinger International, which also owns the Jerusalem Post, the Chicago Sun-Times and the Spectator.
Last week Hollinger International announced that former Telegraph Group managing director Jeremy Deedes is to return to the newspaper company as chairman and chief executive with responsibility for overseeing the impending sale of its titles.
