Telegraph holds out for more

BY MATHEW HORSMAN

The independent committee reviewing plans to reorganise the Telegraph group is holding out for a higher offer for minority shareholders before recommending the deal, according to sources close to the company.

In addition, they are seeking assurances that the offer can be fully financed before making any public comment on an eventual offer.

The complicated reorganisation would see shares in the Telegraph, controlled by Conrad Black's Canadian holding company Hollinger, sold to another Hollinger vehicle in the US, American Publishing. Hollinger has said it would tender its stock, representing 58.5 per cent of Telegraph's common shares, in exchange for shares in American Publishing. Minority shareholders would be offered shares or cash.

As part of the reorganisation, Mr Black's US and Australian holdings and a block of shares in Southam Inc, a large Canadian publisher, would be transferred to American Publishing.

The reorganisation is further complicated by Hollinger's ownership of both the selling and buying vehicles. Hollinger has a 64 per cent equity interest and a 97 per cent voting interest in American Publishing.

As a result, the cash price suggested by Hollinger, thought to be between 460p and 480p a share, would have to be approved by independent committees at both American Publishing and the Telegraph group.

Mr Black recently enraged members of the independent committee, as well as Telegraph institutional shareholders, by telling the Independent on Sunday that the price would be "nowhere near" 500p. The shares were trading yesterday at 449p, well below the 600p-plus range of last year, before the Telegraph joined the circulation price war.

The Telegraph's independent committee, chaired by Lord Swaythling, chairman of Rothman International, is believed to be pressing for a sweeter offer. One suggestion, thought to have come from the independent committee's advisers, Rothschilds, would see investors sell their Telegraph shares at a level close to Hollinger's suggested price but still receive the next scheduled dividend payment, due in October. Last year, investors were paid 7.5p a share in the comparable period.

The committee's advisers are believed to have put a much higher valuation on the shares, well in excess of 500p. A source close to the deal said the value of Telegraph's 20 per cent holding in John Fairfax Holdings, the Australian media group, and the 15 per cent holding in Southam would be "fundamental" to arriving at a final price.

Other valuation issues include the future course of the price war and the likely effects of rising newsprint costs on Telegraph's profits.

Hollinger insiders concede the difficulty of arriving at a price. "American Publishing clearly wants to negotiate the lowest price it can for the shares, while Telegraph shareholders want the best price they can get," a senior Hollinger executive said.

Hollinger hopes the Telegraph committee will make its recommendation by 10 May, although the independent committee may take much longer.

American Publishing's independent committee, chaired by Richard Pearle, is still reviewing the terms of the offer. David Dodd, the company's chief financial officer, said "the two processes are co-ordinated", suggesting the US committee report is likely to be the same as that of the Telegraph independent directors.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Richard Norris in GQ
mediaGQ features photo shoot with man who underwent full face transplant
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
News
The Swiss Re tower or 'Gherkin' was at one time the UK’s most expensive office when German bank IVG and private equity firm Evans Randall bought it
news
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on