Hollinger bidders call on the board to clarify options

Bidders for Hollinger International yesterday urged the board to clarify its sale or break-up options for newspaper assets, including the Daily Telegraph, Chicago Sun-Times and Jerusalem Post.

Companies including the UK's Daily Mail and General Trust and Express Newspapers are seeking details on whether the US-listed publisher will proceed with a long-running auction after it scored a stunning legal victory against former chairman Lord Conrad Black this week.

Hollinger International has already received indicative offers for the Telegraph Group and the Chicago titles.

But the sale process is now expected to slow down, or halt altogether, as the Hollinger board considers whether a break-up remains its preferred option following Thursday's court ruling in Delaware.

The ruling effectively blocked attempts by Lord Black to sell control of the group to Britain's Barclay brothers through a $466.5 million (€375 million) offer for Hollinger Inc, the holding company that controls 30 per cent of the publisher's equity and 73 per cent of the votes.

Instead of a break-up, the Hollinger International board, which is being advised by Lazard, is expected to invite outright takeover offers for the company. This would avoid the tax liabilities threatened by selling individual assets.

Following the ruling, the process is likely to take several weeks.

This appears to frustrate plans by the Barclays to complete their offer as early as next week.

That pressing timetable persuaded Hollinger to ask preliminary bidders for assurances on how quickly they could finalise an offer - and at what regulatory risk.

Private equity investors argue the Barclays face fewer regulatory hurdles than either DMGT or Express.

Press Holdings International - the acquisition vehicle the Barclay brothers set up to buy Hollinger Inc - may yet consider an outright offer for Hollinger International, with a view to taking the company private.

Insiders said that the group had the financial firepower to contemplate such a move, which would cost more than $1.5 billion

Having launched an auction and battled to prevent Lord Black from selling control to the Barclays, it would be difficult for the Hollinger board to abandon the process. But the company now has time to consider its preferred option. - (Financial Times Service)