Court blocks Telegraph sale deal

BRITISH establishment newspaper The Daily Telegraph could soon be in the hands of a man who made his fortune from pornographic magazines, after an American court blocked a deal to sell control of the paper.

The court rejected plans by media tycoon Conrad Black, the major shareholder and former chairman of Telegraph owner Hollinger International, to sell the paper in a private deal to British media and property billionaires David and Frederick Barclay.

Media analysts said the decision paved the way for publisher Richard Desmond, owner of the Express and Star newspapers and a number of adult magazines and TV channels, to succeed in his proposed £500 million (€714m) takeover bid.

Ireland on Sunday owner Daily Mail & General Trust is also believed to be in the running. But Mr Desmond’s spokesperson was reported as saying that his joint ownership of the West Ferry printing plants, which prints the Telegraph and the Express, gave him a “trump card” to play in the ongoing battle.

West Ferry is jointly owned by Mr Desmond’s Northern & Shell group and Hollinger, but the sale of Hollinger may trigger a change of ownership clause that could allow Mr Desmond to buy out Hollinger’s stake.

This would make life difficult for any other owner of the Telegraph and would make the group less attractive if the change of ownership clause was upheld in the courts.

Mr Black decided to offload his stake in Hollinger after the company’s minority shareholders challenged him in a dispute over unauthorised payments last year.

Canadian-born Mr Black, who renounced his citizenship and was made a lord by the British government, denied any wrongdoing.

The American court ruling said Mr Black acted “in a cunning and calculated way” in his attempts to sell Hollinger to the Barclay brothers and that he “repeatedly acted in a manner inconsistent with the duty of loyalty he owed the company”.

Mr Black said he “respectfully” disagreed with the court’s findings but hoped that Hollinger shareholders would get more money from a sale on the open market. British merchant bank Lazards plans to auction off the group’s assets, which include other high-profile newspapers such as the Chicago Sun-Times and the Jerusalem Post.

Private equity groups including Candover and Collins Stewart are known to be interested in the proposed auction, while the Barclay brothers could still attempt to wrest control of the group by outbidding competitors.

The Barclays’ existing newspaper interests include The Scotsman and The Business.