Tim Burt

The agreed takeover bid for Hollinger Inc, controlling shareholder of the publishing group behind the Telegraph titles, is unlikely to be hampered by a lengthy competition inquiry, UK government officials hinted yesterday.

Publishing assets controlled by the Barclay brothers - comprising the Scotsman, Edinburgh Evening News, Scotland on Sunday and the Business - would not constitute sufficient market dominance to trigger an antitrust investigation, even if they were combined with the Telegraph Group, said officials familiar with the process.

Under UK regulations, deals involving obvious competition issues would be examined by the Office of Fair Trading (OFT), while the Department of Trade and Industry could ask Ofcom - the new media regulator - to scrutinise public interest and plurality tests raised by the deal.

Given the relatively modest circulations of the Barclays' existing titles, however, officials said the deal might not trigger an Ofcom investigation.

"It is up to the trade and industry secretary to refer the case to Ofcom, taking into account any issues raised by the OFT. But this deal may not require that," said one official.

Newspaper deals face an additional plurality test to ensure that proprietors would not exercise market dominance, while also being "fit and proper" to run a newspaper.

A senior newspaper executive yesterday said: "It's hard to conceive a problem with competition issues against the Barclays, and the regulators do not want to leave the Telegraph in limbo for months while they look at it."

In the US, neither the Department of Justice nor the Federal Trade Commission is expected to intervene over a change of ownership at the Chicago Sun-Times. But they could act if the continuing inquiries by the Securities and Exchange Commission warned that the sale would harm the interests of shareholders.

In the UK, other potential bidders such as Daily Mail & General Trust (DMGT) or Express Newspapers would have faced an almost certain inquiry. Both groups are thought to be still interested in making an offer if Lazard, which is advising the Hollinger International board, recommends a break-up.

"Lazard is reviewing the situation and they will come back to all the bidders once they've digested the implications of the Barclays' approach," said one newspaper executive, who declined to be named. - (Financial Times Service)