Black mounts another bid for Telegraph

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The Independent Online
Conrad Black drew a line under his turbulent four-year relationship with the City yesterday, offering to buy back the 36 per cent of The Telegraph not already owned by Hollinger, his privately owned investment vehicle. The pounds 273m cost of buying the minority puts a value of pounds 763m on the newspaper publisher.

Shares in the company, which publishes the daily and Sunday Telegraph newspapers, surged 96p to close at 559p, just short of the offer. Including a 10p special dividend, the bid is worth 570p a share, close to the 620p high reached in May 1994, and at least 100p more than a similar, failed bid tabled by Mr Black a year ago.

That was rejected by independent directors who, led by Lord Swaythling, yesterday recommended acceptance of the latest offer. The directors were advised by NM Rothschild, the merchant bank that a year ago said Mr Black's offer undershot their own 500p valuation of the company.

The latest offer could be increased if The Telegraph's 25 per cent interest in John Fairfax Holdings, publisher of the Sydney Morning Herald and Melbourne Age, is sold in the next two years for more than A$3 (pounds 1.56) a share .

Daniel Colson, deputy chairman and chief executive of The Telegraph, as well as a director of Hollinger, said the daily paper would be seeking a rise in its cover price when conditions were "appropriate".

"We will see how it goes," he said, "but at the appropriate time the cover price will go up. If it was not for the nonsensical price war with the Times we would be at least at the 48p level seen prior to the price war two years ago." The Telegraph is currently priced at 40p compared to 30p for the Times.

The Telegraph's short life as a publicly quoted company has been characterised by acrimonious controversy, which reached a peak with the resignation in June 1994 of the company's stockbroker Cazenove.

The blue-blooded broker resigned its position in protest at the sale by Mr Black of shares worth pounds 79m only weeks before the Telegraph joined in the newspaper cover price war started in September 1993 by Rupert Murdoch's News International, publisher of the Times.

The reduction in the Telegraph's cover price from 48p to 30p to match the Times sent its shares into a tailspin and the company's managing director, Stephen Grabiner, had to apologise to the company's employee shareholders. The City was also furious with Mr Black and, although he strongly denied being blackballed, their relationship never recovered.

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