Express row over £60m deposit

Parties interested in entering the exclusive stage of negotiations to buy Express Newspapers are being asked to produce a non-refundable deposit of up to £60m.

Parties interested in entering the exclusive stage of negotiations to buy Express Newspapers are being asked to produce a non-refundable deposit of up to £60m.

By the end of last week, the number of possible bidders had swollen to five, and City advisers to Express owners United News & Media, Dresdner Kleinwort Benson, are thought to have come up with the radical idea as a method of keeping the process under control.

It is now understood that any party wanting to enter into exclusive negotiations can only guarantee their place at the table by laying down a deposit equivalent to 50 per cent of their intended first bid.

This is because of UN&M, headed by Labour peer Lord Hollick, is providing sensitive commercial figures to competitors in order to give them enough information to make a bid.

On Friday, Hollinger, the owner of the Daily Telegraph, confirmed that it would be joining the Daily Mail & General Trust and the Hinduja brothers in the race to get their hands on the Express business, with the Barclay brothers, owners of the Scotsman, waiting in the wings. Suggested levels of initial bids by any of the three range from £100m to about £130m.

Since the proposed deposit would be non-refundable, the cost of entering into unsuccessful exclusive negotiations would be crippling.

One source close to the talks said: "I've never seen anything like this deposit idea before. It's crazy, unprecedented, and I have a feeling that none of the bidders are going put up with it."

A potential bidder said: "This makes me question whether Hollick really wants to sell the thing." He argued that, as any bid is likely to go to the Competition Commission which could block a deal, this would give free money to UN&M. A spokesperson for DKB offered no comment on the matter.

Meanwhile, the bidders are sharpening their swords in readiness for the skirmish. Hollinger is understood to have taken Merrill Lynch on as advisers, even though the US investment bank acted as advisers to United News & Media during the battle for ITV earlier in the year.