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Your support makes all the difference.The Barclay brothers are working on a revised bid for The Daily Telegraph, The Sunday Telegraph and The Spectator magazine this weekend and are now prepared to enter a formal auction for the newspapers, which could value the titles as high as £500m.
The twins, who own the Ritz hotel and The Scotsman newspaper, are prepared to compete against rivals - including Richard Desmond, owner of the Express titles, and the owners of the Daily Mail - despite Thursday's ruling in a Delaware court, which blocked their separate deal with Conrad Black. Lord Black, the controlling shareholder in the parent company, Hollinger International, was castigated in court for being "evasive and unreliable".
The deal would have handed the Barclays control of the Telegraph Group, which includes the Telegraph newspapers and The Spectator. Lazard, the investment bank that is handling the auction, will send out prospectuses to existing bidders this week.
Hollinger International also owns the Chicago Sun-Times and The Jerusalem Post, which are up for sale but not prime targets for British buyers.
Despite the twins' continued determination to buy the newspapers, they are concerned that the bidding structure proposed by Lazard could be opposed by the US tax watchdog, the IRS.
It is understood the Barclays' advisers will not place a bid until they are satisfied there will not be a tax issue. The tax problem may be complicated, and could scupper the auction. Hollinger International faces a capital gains tax of 35 per cent on the profits from the sale of any assets, which could land it with a tax bill of up to £350m. Lazard is attempting to set up a new tax structure to avoid the hefty tax bill, but this may cause trouble with the IRS.
The Barclays are said to be "very nervous" about the proposed structure and do not want to run the risk of becoming embroiled in a tax investigation if they succeed in buying the Telegraph Group.
Hollinger International has stated that it will only proceed with the auction if it is in shareholders' interests.
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