±±¾©Èü³µpk10

Its focus is likely to be on whether alternative bids are viable, while looking carefully at Black's agreement with the Barclay brothers. It also elected Gordon Paris, its interim chief executive, as the chairman.

After a week of frenetic activity, which saw the former Hollinger International chief executive and chairman Lord Black file a court injunction in Canada to prevent Hollinger interfering in the proposed sale of his stake to the Barclays, it seems likely but not certain that the Barclays will be successful.

It has also emerged that the US Securities & Exchange Commission has told shareholders that it will not intervene in the Barclay brothers' bid and will focus instead on its ongoing investigation into financial scandal at Hollinger.

If successful, the Barclays will take control, via Black's 73 per cent voting rights in the US-listed company Hollinger International, of The Daily Telegraph, The Sunday Telegraph, The Spectator and overseas titles including the Chicago Sun-Times.

The deal was met with cautious optimism by advertisers and agencies.

Some feared that a potential sale of Hollinger's UK assets to a rival newspaper group, such as Richard Desmond's Express Newspapers or to Associated Newspapers, would raise competition issues.

Bob Wootton, the director of media affairs at ISBA, said: "We take a pretty neutral view because their (the Barclays') acquisition of The Telegraph doesn't appear to raise any competition issues and fewer public interest plurality issues than other rumoured bids."

The Barclays, through their Holyrood Holdings subsidiary, own titles including The Scotsman, Scotland on Sunday and The Business. However, they do not possess a mass-circulation daily paper outside Scotland.

Paul Thomas, the press director MindShare, said: "From a trading point of view, by not strengthening the position of the other newspaper groups, this is a good deal - a deal with Associated would have put it in a very dominant position."

Observers are not anticipating immediate, dramatic changes in the way Telegraph Group is run if the Barclays are successful. They have a reputation for not taking an interventionist approach toward the editorial of the titles they own. However, some suggest that there is room for cost-cutting at The Telegraph and argue that the Barclays have a reputation for running their newspaper businesses on a shoestring.

The deal between the brothers, Sir David and Sir Frederick, and Conrad Black was finalised in a whirlwind of activity last weekend after three months of talks.

Hollinger International's decision to remove Black from the chairman's role on Saturday hastened the conclusion of the sale. Critics of Black say that the deal undervalues the group. But Sir David has indicated that it involves taking on a risk given the current investigations into Black's dealings and the $140 million of debts the brothers will inherit.

The complex deal involves the Barclays acquiring, via Black's controlling stake in his Toronto-based company Hollinger Inc, 30 per cent of the shares in Hollinger International. These shares allow Black 73 per cent of voting rights.

Doubts had surfaced over the validity of these rights transferring to the new owners because they collapse if the company changes hands. However, the brothers are said to have received legal advice that their purchase of Hollinger Inc does not involve a change in Hollinger International's ownership.

Hollinger shareholders and potential rival bidders see this confusion as a potential way to scupper the Barclays' bid. Both Express Newspapers and Associated's owner, Daily Mail & General Trust, are said to be monitoring the situation closely and are likely to make a move if there is any opportunity.

The deal surprised Hollinger International, which has filed a $200 million lawsuit against Hollinger Inc, Black and other executives over alleged unapproved payments.

Hollinger International has appointed the investment bank Lazards to conduct a review on a possible sale or break-up of the company. This process is continuing, with the board asking Lazards to receive offers for its assets, including The Daily Telegraph, The Sunday Telegraph and The Spectator.

The Barclays are said to have held talks with Lazards and these will continue as they hope to complete the deal.

Sir David has conceded that he could be dragged into a legal battle with Hollinger International lasting up to three years if it decides to contest the deal, but insisted it would still go ahead.

TIMELINE: THE HOLLINGER CRISIS

April 2003: Hollinger International warns of potential liquidity crisis because of financial shortfalls

May 2003: Shareholders demand inquiry into £17.8 million payments made to senior executives

August 2003: Lord Black insists he'll never sell The Daily Telegraph despite Hollinger's financial problems

November 2003: Black retires as Hollinger chief executive but denies any wrongdoing. Company considers selling its assets, including the Telegraph Group. Rival groups vie for control of Hollinger's newspapers. Daily Express owner Richard Desmond is favourite to capture The Telegraph. Mohamed Al Fayed, Axel Springer and US group Gannet weigh up bids

December 2003: Up to 50 parties declare interest in Hollinger's newspaper assets

January 2004: Black refuses to testify before a US Securities & Exchange Commission inquiry into disputed payments. Black and others sued by Hollinger International special committee for more than $200 million. They are alleged to have collected unjustified fees and altered company records to conceal their actions. Barclay brothers seal deal for Hollinger, valuing it at around £260 million

THE UK PLAYERS

Martin Newland (left) and Jeff Randall

Reports have suggested that if the Barclay brothers' bid succeeds, they would consider replacing The Daily Telegraph's editor, Martin Newland, with the BBC's business editor, Jeff Randall. Randall apparently impressed the brothers during a stint editing the Sunday Business. However, Sir David Barclay went out of his way this week to praise the editor of The Sunday Telegraph, Dominic Lawson. Lawson has long held an ambition to become the editor of the daily title.

Boris Johnson (left) and Kimberly Fortier

Senior executives at The Spectator, including the editor, Boris Johnson, and the publishing director, Kimberly Fortier, are still said to be interested in staging a management buyout of the title if a new owner intends to sell it. However, this is complicated by the eventual outcome of the deal and the intention of the Hollinger International board to listen to bids for its assets. The Spectator is part of Telegraph Group and bidders may want to keep the title as a trophy magazine.

Andrew Neil

The position of Andrew Neil, the editor-in-chief of the Barclays' titles, is also in question. Though he would appear to be in a strong position for a key role in the enlarged Press Holdings International, he is said to have played no part in the Barclays' discussions with Lord Black.

Richard Desmond

Northern & Shell and Express Newspapers' owner is keen to buy Telegraph Group. Whatever happens with the deal, he will have a role to play because Express Newspapers and Telegraph Group jointly own the Westferry print plant.

Dan Colson

Telegraph Group's chief executive, Dan Colson, recently presided over a restructure of his management team amid the turmoil at his parent company. He is said to have doubts about a tabloid paper but Sir David's comments this week in favour may force his hand if a deal is done.

Lord Rothermere

Reports suggest that Daily Mail & General Trust had teams of lawyers and accountants working on a bid for Telegraph Group. However, such a move would undoubtedly attract the attention of the UK regulators.