Telegraph bids heading for more than $2b

By PHILIP THORNTON

The three-horse race for the London-based Telegraph is set for a tight finish this week amid rumours that bids for the newspaper group could exceed £700 million ($2.02 billion).

Gordon Paris, the interim chief executive of Hollinger International, the parent company, is understood to be flying to London today.

One bidder said it expected a decision to be announced this week.

The last three bidders, the Barclay brothers, a consortium including the Daily Mail General Trust (DMGT) and another consortium of two investment firms, were asked to confirm their bids last week by Lazards, the merchant bank running the auction.

DMGT, which is working with venture capital company CVC, is understood to be leading the race with a bid at the high end of the £600 million to £700 million range, according to a source close to a rival bidder.

Advisers to the media group were playing down media reports that it was close to quitting the race.

Both DMGT, and the Barclay brothers, who own The Scotsman and the Ritz hotel, have repeatedly said they are not willing to overpay.

The Barclays and 3i, the private equity firm working with Veronis Suhler Stevenson of the US, are thought to have offered about £650 million.

An adviser to one of the bidders said: "Lazards have done it very well. We expect them to play us off against each other and there will be some last minute horse-trading."

A source for a rival bid said: "A lot of people are playing a lot of games with the process and finding ways to put their opponents off."

The Barclays are thought to be the most likely winners as they have no shareholders or partners and would be able to find cost cuts through the synergy with their existing UK newspapers.

DMGT would also be able to find cost cuts and is known to be keen to add the Telegraph titles to the Daily Mail, Mail on Sunday, the London Evening Standard and its regional newspaper empire. "This is the one deal that can transform the company in [DMGT chairman] Jonathan Rothermere's lifetime," said one source.

- INDEPENDENT