The brothers Sir David and Sir Frederick Barclay, who also bought the Littlewoods retail empire for £750m in 2000, concluded talks with Lord Conrad Black last night via their Press Holdings International vehicle. However, the threat of shareholder legal battles could yet derail it.
News of the sale came as Hollinger Inc announced that Lord Black has been removed as non-executive chairman of the company effective immediately.
Lord Black faces a financial crisis in the US and a possible investigation from the Securities & Exchange Commission after being accused of making $32.2m (£17.9m) in disputed payments from holding company Hollinger to himself and other directors.
In a statement Hollinger Inc, said: "Hollinger International Inc today stated that its board of directors received a letter from Press Holdings International with respect to its intended takeover of Hollinger Inc. The company and the board intend to review the offer for Hollinger Inc and its implications for Hollinger International."
The deal would give the brothers control of not only the Daily and Sunday Telegraph in the UK, but also the Chicago Sun-Times and Israel's Jerusalem Post. They would add them to their Scotsman, Scotland on Sunday, Edinburgh Evening News papers and The Business newspapers. The brothers also formerly owned The European, which they bought from Robert Maxwell.
The Sunday Times says that if the bid is successful it could see newly installed Daily Telegraph editor Martin Newland dumped and replaced by Jeff Randall, the BBC business editor who previously worked for the Barclay brothers editing their Sunday business title The Business.
The deal means the twins would buy the 72.5% stake Lord Black's master company Ravelston owns in Hollinger Inc, which in turn owns Hollinger International, the immediate owner of the Telegraph Group.
The negotiations are reported to have been conducted behind the back of investment bank Lazard, which has been looking at finding buyers for the papers on behalf of Hollinger International.
As many as 50 parties initially declared an interest in buying Hollinger International's newspaper assets, including Richard Desmond, Mohammed Al Fayed and the Daily Mail & General Trust, as well as the USA Today owner Gannett. Spectator chairman Algy Cluff is also believed to be planning a management buyout of the political magazine.
If the Barclay brothers, who are worth an estimated £650m and ranked 34th on the Sunday Times' list of richest Britons in 2003, win control it could spark a battle with Desmond, whose papers share West Ferry Printers with the Telegraph. He could stop the papers being printed at that site.
Andrew Neil, editor-in-chief in the Barclays' empire, has not been included in talks to buy the group. Nor has Aidan Barclay, Sir David's son, who normally has a hands-on role in the business affairs of the twins.
The removal of Lord Black as Hollinger chairman comes after he refused to testify before a US investigation into the $32.2m in payments. Lord Black has pleaded the fifth amendment and refused to incriminate himself before the SEC.
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