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Last Updated: Wednesday, 11 February, 2004, 11:27 GMT
Desmond enters Telegraph battle
Richard Desmond
Will Mr Desmond takeover the Telegraph?
Express Newspapers owner Richard Desmond has confirmed he has made a bid for the Telegraph newspaper titles.

But a spokesman for Mr Desmond refused to confirm reports that the bid to buy the papers from US owner Hollinger International was worth up to 500m.

He also confirmed Mr Desmond's intention to take full control of West Ferry Printers, which prints the Telegraph and Express newspapers.

The business is currently jointly owned by Mr Desmond and the Telegraph Group.

Takeover vow

Mr Desmond's spokesman told BBC News Online: "It is true that Mr Desmond has made a bid but we have not confirmed the level of that bid.

"We have also written to the Telegraph regarding the change of ownership of West Ferry Printers."

According to a report in the Financial Times, Mr Desmond intends to take over the plant irrespective of the outcome of the bid for the Telegraph titles.

HOLLINGER INTERNATIONAL STABLE
Daily and Sunday Telegraph
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Mr Desmond has written to the Telegraph Group's directors claiming a change-of-control clause has been triggered by a 467m bid for Hollinger Inc - the parent company of Hollinger International - from the Barclay brothers.

Under the clause, Express Newspapers should gain full control of the east London printers - Europe's largest broadsheet newspaper plant - Mr Desmond said in the letter.

Further reports said a number of other newspaper groups, including the Washington Post and the UK's Daily Mail, are also set to bid for Hollinger's Telegraph titles.

Private equity firms such as Candover, 3i and Apax could also submit bids before the deadline of 1700 GMT on Thursday 12 February.

But it is still not clear whether a sale of the newspapers can go ahead, as Hollinger International is embroiled in a number of bitter lawsuits and countersuits with its ousted chief executive, Conrad Black.

Court wrangles

In January, Hollinger International sued Lord Black claiming he and other executives had received millions of dollars in unauthorised payments.

Lord Black then announced a surprise deal to sell his controlling stake in Hollinger Inc to the Barclay brothers - who already own the Scotsman newspaper.

Hollinger Inc owns a 30% share in Hollinger International, but these shares carry more than 70% of the voting rights in the firm.

Hollinger International then launched another US court action to halt Lord Black selling the stake, which in turn saw Lord Black apply for an injunction to prevent the group from interfering in the sale.

Poison pill

Hollinger International is also attempting to push through a so-called "poison pill" clause under which the voting rights attaching to Hollinger Inc's 30% stake would be diluted if the stake is sold to the Barclays.

If the Barclays brothers do acquire the 30% stake, any Hollinger International agreement to sell the Telegraph titles to a third party would be placed in severe doubt.

One scenario that could bring the legal wrangling to a close would be for the Barclays to buy the remaining 70% in Hollinger International that they are not already attempting to buy.

Reports last month said the brothers had made an informal approach. Some commentators expect a formal approach to follow.


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