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Last Updated: Sunday, 18 January, 2004, 23:31 GMT
Tycoons move in on Telegraph empire
Lord Black
Lord Black resigned when irregularities came to light
Control of some of the world's best known papers, including Britain's Daily Telegraph, appears to be in new hands.

Billionaire twins David and Frederick Barclay have struck a 260m deal for Conrad Black's controlling stake in the Hollinger media empire.

Lord Black has been ousted as Hollinger chairman amid allegations of financial irregularities, which he denies.

He said the sale was "distressing", but his newspapers would be in "good and caring hands".

Tender pending

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 which has attracted interest from a string of bidders including Express newspapers' owner Richard Desmond.

David and Frederick Barclay flank Andrew Neil
It's a very shrewd move to go direct to Black and not await the possibility of the bank selling off bits of the organisation
Roy Greenslade
Media analyst

Express Newspapers and the Telegraph Group jointly own the Westferry printing plant in east London.

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

It gives them Lord Black's 30% stake and his 73% 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.

Media analyst Roy Greenslade said they had been "shrewd" to go direct to Lord Black and not wait for the business to be sold off by a bank.

It is reassuring that at a time when we're in difficulty there are people who want to buy the newspaper
George Jones
The Daily Telegraph

"This way they get total control and do so very quickly," he said.

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.

Control of the Daily Telegraph, the UK's most popular broadsheet and a strong supporter of the Conservatives, will bring them political clout.

Some journalists at the paper on Sunday welcomed the deal.

George Jones, political editor, told BBC News: "I would have thought that they were broadly of the conservative mind of businessmen so I think that they will continue with the political direction of the paper.

"It is reassuring that at a time when we're in difficulty there are people who want to buy the newspaper."

Hurdles to clear

The deal still faces a number of potential obstacles.

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, and the deal will be referred to Ofcom, the UK communications watchdog.

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


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



SEE ALSO:
Profile: The Barclay brothers
18 Jan 04  |  Business
Q&A: What now for the Telegraph?
19 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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