Tory leader in talks to keep Telegraph on side

The Times ^ | November 19, 2003 | Raymond Snoddy and Andrew Pierce

[Prodigal Son]

MICHAEL HOWARD attended a secret lunch with Richard Desmond, owner of the Express group and favourite to buy the troubled Daily Telegraph, to try to secure a promise that the newspaper will continue to support the Tories. The meeting took place only hours after it was announced that Lord Black of Crossharbour was stepping down as chief executive of Hollinger International, the Telegraph’s parent group, over allegations of millions of pounds of unauthorised payments.

Monday’s lunch took place at the Westminster home of Lord Ashcroft, the former Tory treasurer, and the party’s wealthiest supporter, who is a long-standing friend of Mr Desmond.

The lunch, which was arranged shortly after Mr Howard became Tory leader, took place amid growing panic at Conservative Party headquarters that the Telegraph, the party’s house journal, might switch sides at the next general election.

Last year Mr Desmond gave £100,000 to the Labour Party and he has pledged that the Express titles will support Tony Blair at the next election.

At the lunch Mr Howard extracted an assurance from Mr Desmond, the owner of an X-rated television sex channel and a string of “soft porn” magazines, that he would not switch the political allegiance of the Tories’ most loyal Fleet Street ally.

Tory grandees had urged Lord Ashcroft, whose personal fortune is estimated at between £1.5 billion and £2 billion, to consider making his own bid for the newspaper. A spokesman for Lord Ashcroft, asked about the meeting, said: “We do not comment on rumours and speculation.”

A spokesman for Mr Desmond said last night: “As a major newspaper publisher Mr Desmond meets political leaders all the time. He was delighted to spend some time with Mr Howard yesterday.”

Mr Desmond is a past supporter of the Conservatives and made a £5,000 contribution when Margaret Thatcher was Prime Minister. But the Express owner was contemptuous of William Hague and transferred his support to Tony Blair.

While the Express titles will continue to support Labour with Mr Blair as Labour leader Mr Desmond is adamant that if Gordon Brown were to become Prime Minister “all bets would be off”. The Desmond political manoeuvres took place as the man who bought the Daily Express three years ago for £125 million prepared a bid of about £300 million for the Telegraph Group.

But he is likely to face enormous competition, if the Telegraph is formally put up for sale, from Lord Rothermere’s Daily Mail and General Trust.

News International, publisher of The Times, made it clear yesterday that it was not interested in the Telegraph. Les Hinton, chairman of News International, said yesterday: “News International has expressed no interest in acquiring the Telegraph and we have no interest in acquiring the Telegraph group.”

Mr Desmond’s Northern & Shell company has appointed the stockbrokers Seymour Pierce to prepare a bid, confirming reports in The Times that he is the early frontrunner. Keith Harris, chairman of Seymour Pierce, was the first to telephone Lazard, the investment bank brought in to examine all options, including the break-up of Hollinger International. Mr Desmond has the support of three banks, Bank of Scotland, HSBC and Commerzbank.

Andrew Neil, publisher of The Scotsman and The Business, may also submit a bid on behalf of his proprietors, the reclusive billionaire Barclay brothers. Mr Neil said last night: “The Telegraph is not for sale. If and when it does come on the market, we will make a staement then.”

Lord Black could fight to keep control of the Telegraph group, which includes The Sunday Telegraph and The Spectator, by restructuring the group or selling his other main asset, the Chicago-Sun Times.

He stepped down as chief executive of Hollinger on Monday after admitting that he and other directors had received unauthorised payments and that there had been inaccuracies in accounts filed with the Securities and Exchange Commission, the US financial regulator.