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.

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
Sport
football
PROMOTED VIDEO
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Arts and Entertainment
Ready to open the Baftas, rockers Kasabian are also ‘great film fans’
musicExclusive: Rockers promise an explosive opening to the evening
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching