'Long way to go' for twin tycoons

By Torin Douglas BBC Media correspondent

Lord Black faces a series of legal battles in America

The Barclay brothers have pulled off a coup - and wrong footed their rivals - by persuading Lord Black to sell them the controlling stake in his newspaper empire, which includes the Daily and Sunday Telegraph, the Chicago Sun-Times and the Jerusalem Post.

By negotiating with Lord Black himself, Sir David and Sir Frederick Barclay bypassed the formal sale of the titles, being handled by Lazards investment bank on behalf of Lord Black's company Hollinger International.

They have also paid less than expected - £260m - around half the price predicted for the Telegraph titles alone.

Potential rival bidders included Associated Newspapers, which owns the Daily Mail group, and Richard Desmond, who owns the Express group and shares a print works with the Telegraph.

But this deal has a long way to go.

Even if the Barclay brothers manage to secure Lord Black's controlling stake in Hollinger International, it will take at least 45 days

It could be challenged by the board of Hollinger International, which announced at the weekend that it was removing Lord Black as chairman and suing him for more than £100m, claiming payments to him were not properly authorised by the board.

He was denied allegations of financial wrongdoing and faces a series of legal battles in America.

"Lord Black may think this is a simple sale but it has a very long way to go", said one observer.

"As well as Hollinger's own board, regulators on both sides of the Atlantic will be looking closely at it."

Those regulators include the Securities and Exchange Commission in the United States, which is already investigating Lord Black's complex financial arrangements.

Long process

In the UK, the deal could be scrutinised by the Office of Fair Trading on competition grounds and possibly by the media regulator Ofcom, on public interest grounds, because the Barclay brothers already own The Scotsman and other newspapers.

All this will take time, so there will not be any impact on the running of the Telegraph titles for many months.

Even if the Barclay brothers manage to secure Lord Black's controlling stake in Hollinger International, it will take at least 45 days.

If regulators become involved, the process will take longer, and if the sale is challenged in the courts it will take longer still.

But assuming it does go ahead, what would it mean for the Daily and Sunday Telegraph?

Conservative supporters

Most observers have welcomed the Barclay brothers as potential owners of the titles.

They are both Conservative supporters - unlike Richard Desmond - so the papers' editorial standpoint would be in safe hands.

They do not own any UK-wide national newspapers so there would be no reduction in the number of owners, as there would if the Express or Mail groups bought the Telegraph.

And, unlike Lord Black himself, they do not have a reputation for interfering in the editorial polices of their titles, though one of their key newspaper executives, Andrew Neil, is more interventionist.

Uncomfortable facts

They also have a great deal of money to invest in the Telegraph papers, which have been starved of cash in recent years following a debilitating price war with Rupert Murdoch's News International.

That could prove crucial if the Telegraph is to follow the Independent and The Times in publishing a tabloid edition.

They also have a reputation for investing for the long term.

On the downside, the Barclay brothers are often described as "secretive" and obsessive in protecting their privacy, a trait that sits uncomfortably in a trade which makes a virtue out of exposing uncomfortable facts.

And so far they have not been very successful as publishers - most of their titles have lost money.