Telegraph race 'loses US giant'

The bids follows Lord Black's failed attempt to sell his stake

US news giant Gannett has pulled out of the bidding for the Daily Telegraph and its Sunday sibling, weekend newspaper reports say.

According to both the Observer and the Sunday Times, the US group believes the price has reached "crazy" levels of more than £600m.

Daily Express owner Richard Desmond gave up last week for the same reason.

Gannett's stable includes USA Today and hundreds of US local papers as well as the Newsquest group in the UK.

Close race

The bids are being shepherded by investment bank Lazards, which is thought to have received about a dozen offers.

The front runner is believed to be the Daily Mail group, with an offer of about £700m for the two Telegraphs and the Spectator magazine.

But the Barclay brothers' company may be close behind on about £650m.

The brothers' first attempt to take control of the Telegraph failed after a vicious courtroom battle in the US earlier this year.

The pair had agreed to buy the controlling stake in the Telegraphs' owner, Hollinger International, held by press baron Conrad Black.

But a Delaware judge found that Lord Black had no right to make the sale without agreement from the rest of Hollinger's board, having allegedly taking massive fees out of the company.