The Barclay brothers still want to buy the UK's Daily Telegraph newspaper, Reuters said, quoting a spokesman for the tycoons.
The battle for the paper heats up
Last month, the twins were blocked in their attempt to purchase the company that controls the UK's top broadsheet.
The announcement is the latest twist in a long-running battle for control of some of the world's best-know titles.
Any new bid would only be for the paper and its sister publication, the Sunday Telegraph, the spokesman said.
Twists and turns
The feud, which has pitted media mogul Conrad Black against shareholders, has been as complex as it has bitter.
Lord Black was ousted as chairman of Hollinger International amid allegations that he and other top executives had paid themselves more than $32m without approval from the company's audit committee.
Following his removal from the head of the empire he helped build, Lord Black agreed to sell his controlling stake in Hollinger International to the Barclay brothers.
The Canadian-born peer owns the key stake in Hollinger International through Hollinger Inc, which is in turn controlled by his investment vehicle Ravelston.
That would have given the reclusive millionaires David and Frederick Barclay control not only of the Telegraph group, but also titles such as the Spectator magazine, the Chicago Sun-Times and the Jerusalem Post.
Based in the Channel Islands, the Barclays are the owners of Press Holdings International which controls several UK regional titles. Their other interests include the Ritz Hotel in London and Littlewoods.
Hollinger International's board, however, opposed the sale of the newspaper titles, saying it underestimated their value and benefited only Lord Black.
US Judge Leo Strine agreed, blocking the sale and stating in his ruling that Lord Black had "breached his fiduciary and contractual duties persistently and seriously".
Shareholders welcomed the news and promptly opened the bidding process to other investors. It is currently considering offers from, among others, Richard Desmond, publisher of the UK's Express newspapers and adult entertainment titles.
Some analysts had expected the Barclays to walk away because the deal might have been more trouble than it was worth.
It seems that they have just decided to narrow their focus.