Gordon Paris, chief executive of Hollinger International, the Telegraph’s owner, is this weekend checking details of the bids before putting them to a board meeting. The announcement of the winner, who is likely to pay about £690m, could come as early as Tuesday, but sources close to the sale said legal hiccups could delay it until later in the week.
3i, which is bidding with American media investment specialist Veronis Suhler Stevenson, faces stiff competition from the Barclay brothers, the reclusive billionaire twins who count The Scotsman among a business empire including the Ritz, Littlewoods and ShopDirect.
Yesterday, media executives tipped the Barclays, but sources close to both bidders last night said they were in the dark as to the outcome.
“If anyone says they know what is going to happen, they are lying,” said a senior source.
Analysts said the assumption that the Barclays could pay more was mistaken. They pointed to the cost-cutting expertise of Montgomery, 3i’s media adviser and likely Telegraph chairman or chief executive if it wins, as crucial to 3i having stayed in the race to date. Sources insisted Montgomery’s plan was not only about cutting costs, but also about increasing revenue.
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Bidders are also nervous that Lord Black could intervene in the sale. Hollinger must put any disposal to a shareholder vote if it is deemed to amount to “substantially all” of the group’s assets. Black controls 72.3% of Hollinger’s voting rights.
Last Friday, Tweedy Browne, Hollinger International’s largest institutional shareholder, urged Hollinger to do more to recover money from Black, and asked why the company had not started legal action against its own directors.
Even if the Telegraph sale went through, Tweedy Browne said, “he (Black) still couldn’t come close to reimbursing (the company)”.