Mail presses home its Telegraph advantage

Three weeks into the Black scandal, there are only two British newspaper groups seriously interested in the Telegraph titles. The war of words will simmer down for a while, probably until after Christmas, as Lazards assesses the full extent of the Hollinger disaster. So how do the rivals stand?

Richard Desmond, Express owner and soft porn merchant, got off to a flying start, with his stranglehold on the West Ferry print works, and banks lining up to lend him the money. But much of that has dissipated. The threat to his partners in the print works looks like bullying, and could open him up to expensive years of legal contest. And he stands to lose a lot of money if those presses fall idle. Reports about his tax affairs and his failure to sell the porn empire have not done him any good on the 'fit and proper' front.

The Mail group, meanwhile, has grown in confidence. Lord Rothermere regards winning the Telegraphs as a once-in-a-lifetime opportunity. He would throw editorial resources at the papers, keep them as broadsheets, and try to give them a younger zeitgeist. All this would require an exceptional editor, but not Paul Dacre, who could not be spared from the Mail.

On the financial side, Rothermere believes he could get £450 million cash to bid, and stay within agreed borrowing limits. Just as important, he is adamant there is print capacity.

Rothermere will argue against the competition authorities that not all his papers are as right-wing as the Mail. Most of the regionals are leftish, or neutral, while the Evening Standard has recommended Labour in the last two elections.

Whether this will impress the authorities remains to be seen, as will his arguments about market share. Newspapers are not supermarkets, but the government may still be wedded to the Safeway idea that four is good, three is bad.

Even so, after the first few rounds, Rothermere is clearly ahead on points.

Centre Parcs wax, Tussauds wanes

After Centre Parcs, what's next for the Collins Stewart treatment?

The broker, led by the ever-innovative Terry Smith, has pulled off a £285 million deal to buy the holiday-home-in-a-dome business, and float it on the Alternative Investment Market. The deal makes good sense for a business that generates a strong and reliable cash flow, and gives yet another shot in the arm to Aim, which is showing how attractive a lightly regulated market can be (Stock Exchange - please note.)

By coincidence, investment bank Lazards is sitting on just such a business. Tussauds, the internationally famous wax museum in London, has proved to be a harder one to shift than they thought. The initial asking price - hyped up to around £900m -- has not been reached, and several private equity groups are believed to have folded their cards and walked away from the table. BC Partners and Permira have apparently lost interest, while even French group PAI, once the front-runner, has cooled on Tussauds at that price.

Smith is thought to have expressed an interest to Lazards some time ago, but was haughtily waved away. They may be more amenable now that the asking price is struggling to stay above the £700m level. Maybe it's time for somebody at Lazards to pick up the phone to Collins Stewart.

US feels Europe's steely grip? Hardly

I cannot go along with the view that the freedom-loving world, led by Europe, has scored a great victory against that trade tyrant George W Bush. True, the USA has backed down from its steel tariffs, but it is a delusion to see this as a triumph for the free-traders against the protectionists, for the following reasons.

The steel tariffs were not meant to impress Europe, or the low-cost producers of the Far East. They were intended to convince the voters of Pennsylvania and upstate New York that Bush cared about their (traditionally Democratic) communities. With less than a year to go before a presidential election, it was necessary to offer them something, and a few months of Dubya as defender of their jobs will have gone down nicely.

Especially as the falling dollar, and rising demand from China, make it more economic for those same steel mills to step up production, and even take people on again. The tariffs were short-term measures designed for a specific political purpose. Now that has been served, they can be safely lifted.

It's not even as though the European counter-threat was realistic. 'We'll stop buying orange juice, jeans and motor boats from the Americans,' they thundered. Well, that would have been a more serious sanction if they had threatened to ban computer software, aerospace hardware, or financial services, but Europe needs those things, whereas there is plenty of orange juice available elsewhere in the world.

How can the US be regarded as an industrial protectionist when it is running the largest trade deficit in its history? If Europe really wanted to make a point about the damage being done to the world economy, it should have done something about the massive subsidy given to American agriculture, which is strangling the commodity-based societies of the developing world. But then somebody - probably in India, China or Brazil - might have brought up the Common Agricultural Policy. Embarrassing.


A gremlin regrettably crept into the machine last week, when we recorded Lord Hanson as writing 'France and Germany now realise their rules [on the growth and stability pact] are workable at home...' That should, of course, have read 'unworkable'. Apologies to Hanson. And to France and Germany while I'm at it.