Black seeks to block auction of 'Telegraph' titles

Lord Black of Crossharbour moved to safeguard the sale of his controlling stake in Hollinger International to the Barclay brothers last night, in response to the company's attempts to sell its newspaper assets off piecemeal.

The Conservative peer used his 73 per cent voting stake to change the corporate by-laws of Hollinger International. Under the new rules, all company directors have to be present at any meeting to approve a major transaction and any such deal requires unanimous director approval. Although Hollinger International has sacked Lord Black as chairman and chief executive, he remains a company director, as does his wife, Barbara Amiel, and his key ally, Dan Colson, the company's chief operating officer.

Lord Black's latest move in his battle with the board for control of Hollinger International followedthe news, late on Thursday night, that the company had instructed Lazards, the investment bank, to auction off the group's newspapers, which include The Daily Telegraph. That was an attempt by Hollinger International's board to scupper Lord Black's sale of his holding in the company to Sir David and Sir Frederick Barclay, announced last weekend, for £180m.

Now Lord Black has hit back with a strategy he believes will protect his deal with the Barclay twins, which has not yet completed. The Barclays were primarily interested in acquiring control of The Daily Telegraph, The Sunday Telegraph and The Spectator magazine.

The deal with the Barclays was threatened by the Hollinger board's decision to use Lazards to auction off its assets. The Barclays had believed, at the time of striking the agreement with Lord Black, that the stake they were acquiring would allow them to block asset disposals. The issue is now set to end up in the courts.

Earlier yesterday, the Hollinger board had insisted it did not need shareholder approval to activate its plan to see if the price offered for its papers would justify a break-up of the company. A spokesman for Hollinger said: "We believe the board has the necessary approval for selling the company's assets, without the approval of the company's shareholders."

Before Lord Black's move last night, Lazards had started to contact interested parties and had given bidders for the Telegraph and the company's other papers just 30 days to put in a final bid for its individual assets, allowing the group to be broken up. The Telegraph is believed to be worth up to £500m.

The transaction with the Barclays had infuriated the Hollinger board, even though the brothers pledged not to interfere with the work of the special board committee formed by Hollinger International, which in November retained Lazards to explore options for asset disposals.

Potential bidders for the Telegraph, including Daily Mail & General Trust and Richard Desmond's Northern & Shell group, swung back into action yesterday. Unlike the Barclays, many of the UK bidders would not have been able to go for Hollinger as a whole.

Analysts believe DMGT may sell its 29.9 per cent stake in GWR, the radio group, to finance its bid for the Telegraph.