However, the Telegraph Group has refuted the suggestion that any potential buyer of the Telegraph would have to deal with Richard Desmond to secure the newspapers print requirements prior to making a deal. The Telegraph's existing print contract West Ferry expires in 2009.
Telegraph Group chief executive and Hollingers new chief operations officer Dan Colson told PrintWeek: The existing printing agreement remains in force regardless of any change in ownership. He [Desmond] has no bargaining position.
Colson conceded that in the extremely unlikely event that Hollinger sold its flagship title that Desmonds Northern & Shell could enact its option to buy Hollingers 50% share in the newspaper plant.
They will arrive at the same price using the same formula that we did [in 2001]. That formula produced a price that was way over the top by many millions thats why we didnt buy. Like us, I dont think that Desmond will pay twice what its worth, said Colson.
Hollinger announced this week that chief executive Lord Conrad Black would step down from his position tomorrow (21 November), but would remain as non-executive chairman.
A spokesman for N&S said that chairman Richard Desmond was looking out for any sign that the Telegraph Group may sell its stake in the plant.
If he solely owned West Ferry, the spokesman suggested that Desmond would have to be consulted by any new prospective owner of the Telegraph about its printing. The spokesman said: We would hope that any prospective buyer of the Telegraph would have its printing obligations in place.
One source said that if the 800,000 copies of the Telegraph currently printed by West Ferry were not done there, it could be produced using spare capacity at four or five other regional plants.
There has been increasing speculation that Hollinger may be forced to sell some assets in order to meet a 41m payment next spring.
Possible buyers include The Washington Post Company, the Daily Mail & General Trust and N&S.
Hollinger this week admitted that payments to some of its directors had not been properly disclosed, although it rejected any suggestion of impropriety. Colson said: There were procedural cock-ups, although theres no suggestion of wrongdoing or anything criminal in any way. Although it has been embarrassing.
The Telegraph Group tried to exercise its option to purchase West Ferry when N&S bought Express Newspapers from United News and Media in November 2000. But this led to lengthy, costly and acrimonious legal action between the partners concerning the value of the plant during 2001.
A spokesman for N&S refused to comment this week on whether Desmond would make an offer for the Telegraph Group as it was not for sale at the moment.
In the year to 31 December 2002, West Ferry Printers made a pre-tax profit of 13m on turnover of almost 80m.
Others named as potential buyers of the Telegraph Group in the frenzy of media speculation that has accompanied Black's resignation include the Barclay brothers, former Mirror Group chief executive David Montgomery, Carlton television chairman Michael Green, the former managing director of the Telegraph Stephen Grabiner, co-chairman of the Conservative Party Maurice Saatchi, George Soros and the former Conservative Party Treasurer Michael Ashcroft.
Story by John Davies
