Shortlist of 'Telegraph' bidders narrowed to three

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The Independent Online

Three bidders remain in the race to acquire The Daily Telegraph, with the Barclay brothers and 3i definitely still in the contest. City sources said that Daily Mail & General Trust was likely to be the third contender.

Three bidders remain in the race to acquire The Daily Telegraph, with the Barclay brothers and 3i definitely still in the contest. City sources said that Daily Mail & General Trust was likely to be the third contender.

Lazard, the investment bank auctioning the Telegraph on behalf of owner Hollinger International, is understood to be aiming to wrap up the sale in the next couple of weeks. Sir David and Sir Frederick Barclay remain the favourites to win. The private equity group 3i is being advised by David Montgomery, the former chief executive of The Mirror Group. It is thought that the Telegraph will fetch about £600m.

Following a Hollinger board meeting on Thursday night, it was decided to proceed with the sale of the media company's UK newspapers - The Daily Telegraph, The Sunday Telegraph and The Spectator magazine. The company also decided to go ahead with the sale of its Jerusalem Post title, but its US assets, led by the Chicago Sun-Times, will be retained.

Of the last half-dozen contenders for the Hollinger assets, Axel Springer, the German newspaper publisher, and KKR, the US private equity group, had already been eliminated by the beginning of this week. Following the board meeting on Thursday, a further bidder was dropped - it is thought this was a joint offer from the private equity houses Apax Partners and Candover. The remaining bidders will now be given further financial information on the Telegraph titles.

Analysts said it was possible that Apax/Candover would now join forces with DMGT, which parted company with Cinven, its private equity partner, earlier in the auction process. DMGT is the bidder with the greatest regulatory hurdles, which is why it wanted to partner with a financial player that would be able to take on the titles if DMGT is blocked by the competition authorities. It is thought that bids for the Telegraph have to be unconditional.

DMGT publishes The Daily Mail, Mail on Sunday and the Evening Standard in London. Counting the Standard as a national title, acquiring the Telegraph would give DMGT about a quarter of the national newspaper market.

The company would argue that this should be allowed as it is still well below the third of the market that is controlled by Rupert Murdoch's News International.

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