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Last Updated: Sunday, 18 January, 2004, 19:53 GMT
Telegraph empire in tycoons' grip
Lord Black
Lord Black resigned when irregularities came to light
Billionaire twins David and Frederick Barclay have bought a controlling stake in Conrad Black's media empire.

The Barclays have agreed terms to buy Lord Black's 78% stake in Hollinger, which owns titles including Britain's Sunday and Daily Telegraph.

They have now made a takeover offer for the whole of Hollinger.

Lord Black - ousted as Hollinger chairman amid allegations, which he denies, of financial irregularities - said his papers would be in "caring hands".

Ahead of the pack

In a statement he said: "It will be distressing to part from the Telegraph newspapers, the Spectator, the Chicago newspapers and the Jerusalem Post, in particular, but these fine titles must not be hobbled any longer by the current controversies and financial uncertainty.

"They will be in good and caring hands and we will be able to focus exclusively on resolving current legal and public relations concerns."

In theory, there is still a tender under way for control of Hollinger, a target that has attracted interest from a string of bidders including Express newspapers' owner Richard Desmond.

David and Frederick Barclay flank Andrew Neil
Until recently, it was rare to hear the phrase 'Barclay brothers' without the prefix 'reclusive'

The Barclays' deal does not scupper the tender, but effectively puts them in a far stronger position than their rivals.

It gives them 73% of the voting rights at Hollinger, which would be a substantial disincentive for any other potential bidders.

The brothers have valued the firm at 260m, double its closing price on Friday night.

According to sources close to the deal, the brothers intend to take Hollinger private, and see it as a long-term investment.

The Barclays, who have a reputation as reclusive and patient investors, own a varied portfolio including the Scotsman newspaper group, the Ritz hotel and Littlewoods catalogues.

Hurdles to clear

The deal still faces a number of potential obstacles.

Conrad Black's voracious appetite for newspaper acquisition, outspoken conservative views and abrasive tongue have made him a bete noire for liberals

Most pressing is a suit filed on Friday by the US Securities and Exchange Commission (SEC), which attempts to block Lord Black from selling up until its investigation into Hollinger's financial affairs is concluded.

Lord Black is also being investigated by the Hollinger board, which alleges a range of financial abuses including excessive management fees paid to Ravelston, Lord Black's holding company.

There could also potentially be regulatory issues, often a major factor in media takeovers.

But the Barclays feel that there are no likely regulatory impediments to a deal.

The BBC's Rory Cellan-Jones
"The era of the Barclay brothers is about to begin"

Profile: The Barclay brothers
18 Jan 04  |  Business
Telegraph tycoon sacked and sued
18 Jan 04  |  Business
Hollinger 'paid offshore bonuses'
12 Jan 04  |  Business
Desmond 'ready for Telegraph bid'
24 Nov 03  |  Business
Hollinger faces US investigation
20 Nov 03  |  Business
Media tycoon Conrad Black resigns
17 Nov 03  |  Business

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