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.

News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
peopleReports that Brand could stand for Mayor on an 'anti-politics' ticket
News
The clocks go forward an hour at 1am on Sunday 30 March
news
Arts and Entertainment
The Doctor finds himself in a forest version of London in Doctor Who episode 'In the Forest of the Night'
TVReview: Is the Doctor ever going stop frowning? Apparently not.
News
Voluminous silk drawers were worn by Queen Victoria
newsThe silk underwear is part of a growing trade in celebrity smalls
PROMOTED VIDEO
Sport
footballMatch report: Real fight back to ruin Argentinian's debut
News
Candidates with surnames that start with an A have an electoral advantage
newsVoters are biased towards names with letters near start of alphabet
Arts and Entertainment
Isis with Lord Grantham (Hugh Bonneville)
TV
Arts and Entertainment
Jay James
TVReview: Performances were stale and cheesier than a chunk of Blue Stilton left out for a month
News
ebooksAn unforgettable anthology of contemporary reportage
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

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?