Black hints at possible bid block

Lord Black is unhappy with the sale's tax implications

The sale of the Telegraph newspapers to the Barclay brothers could still be upset if Conrad Black has his way.

His holding company, Hollinger Inc, has accused the papers' owner, Hollinger International, of botching the deal.

International's "faltering strategic process" was no more valuable than Black's own earlier attempt to sell the papers to the Barclays, it said.

Hollinger controls International via a minority shareholding, but court action might be needed to block the sale.

More information

In a statement, Hollinger said its dissatisfaction with the proposed terms of the sale was about the valuation and possible tax implications.

Hollinger International now faces a capital gains tax bill following the disposal of its main assets, but there would have been no tax bill to pay had the entire company been sold, as earlier considered.

The Telegraph has been sold at the second attempt

"Hollinger International must provide its shareholders with sufficient information to evaluate properly this transaction in light of alternative opportunities available to the company," the firm said.

Added value

But Hollinger also suggested that the company and its advisers had failed to do any better than Lord Black had done.

"Allowing for currency fluctuations, this is essentially the same valuation that the Barclays put on these assets back in January," Hollinger said.

"A sale of the Telegraph and Hollinger International's other UK businesses involves the bulk of the company's assets and therefore clearly requires approval of the company's shareholders."

Following his ousting as International's chief executive last year over allegations of misusing company money - accusations now the centre of a $1.25bn lawsuit - Lord Black had tried to sell his stake in International direct to the Barclays.

The 29.7% of the firm's shares owned by Hollinger - and thus under Lord Black's sway, via his personal vehicle, Ravelston - nonetheless control more than 70% of the voting rights.

A private sale would therefore have given the Barclays control of the whole of International's stable for just £260m, rather than the £665m they are now paying for the Telegraph group alone.

Later, it emerged that the Barclays had contemplated extending an $18-a-share offer to the rest of International's shareholders, although they never developed the idea into an offer.