Waiting for the outcome of the auction of the Telegraph Media Group is like hovering near the supermarket bread section to see who will buy the last full-priced sourdough loaf before the entire bakery is stickered with discounts. It turns out quite a few men are keen.
When Howard Barclay, son of the late David Barclay, told a court hearing his uncle Frederick’s divorce case in July that the Telegraph was a “distressed asset” that was “not going to be an easy asset to sell”, he was speaking as someone who did not want it sold.
Howard and his brother Aidan were removed from the news publisher’s board in June by its lenders, Lloyds Banking Group, which placed it in receivership and put it on the block in a bid to retrieve the bulk of about £1 billion (€1.15 billion) in outstanding debt.
The queue of suitors now forming as Goldman Sachs handles the auction on behalf of Lloyds suggests that the price fetched by the Daily and Sunday Telegraph titles will be anything but distressed.
Among them are two familiar front-runners: German publisher Axel Springer and Daily Mail owner DMGT, led by Jonathan Harmsworth, aka Lord Rothermere. Both companies were underbidders back in 2004, when David and Frederick Barclay acquired the group from Hollinger International for £665 million.
Even by the standards of the UK press, the history here is fraught. Hollinger International was, at the time, fresh from deposing Conrad Black, its former chief executive and then controlling shareholder, amid accusations of financial impropriety.
Black, a Canadian press tycoon turned British peer who went on to spend more than three years in prison after a conviction for mail fraud and obstruction of justice (he obtained a presidential pardon from Donald Trump in 2019), had initially tried to sell his stake in Hollinger International to the Barclays, only for a US court to block the sale.
But when Hollinger International agreed to sell the Telegraph to the Barclays, Black sued to stop the deal, only for a US court to block his attempt to block the sale. Got that? The point is, like the Barclays, he did not let go of the Telegraph easily.
Hollinger subsequently boasted that it had secured an “epic” price for the Telegraph after the process attracted as many as 57 initial expressions of interest. For a similar number to flock to it this time around seems deeply implausible. Still, though, there’s a crowd.
Perhaps the most intriguing of the interested parties is Axel Springer, the company behind Die Welt and Bild in Germany as well as Politico and the digital-only publication Insider.
The paper might seem like a broadsheet from a bygone age, but it’s one with more than one million mostly digital subscribers, turnover of £254 million and annual pretax profit of £39 million
The Berlin-based company, which has been majority owned since 2019 by US private equity group KKR, has long coveted a presence in the UK newspaper market, having also lost out in the race to buy the Financial Times in 2015.
It doesn’t appear minded to throw about silly money, however, with the company’s attention to its bottom line in the KKR era proving consistent: executives earlier this year were quick to extol the cost-saving virtues of artificial intelligence as they let go staff. That’s not a fate that will have the Telegraph’s employees sleeping easy.
DMGT approaches the Telegraph from a whole other runway. It doesn’t just own the Daily Mail and Mail on Sunday, it also owns the i newspaper and the free title Metro. Over the summer, the company told the Financial Times that it had held talks with investors in the Middle East about rustling up a bid, but no formal plans were confirmed.
The prospect of the Daily Mail and the Daily Telegraph – twin horsemen of the pro-Conservative, pro-Brexit apocalypse – being part of the same stable should alarm the UK’s competition regulators. I know it alarms me.
Irish Independent owner Mediahuis, the Antwerp-headquartered news publisher with operations in Belgium, the Netherlands, Germany and Luxembourg as well as Ireland, previously flirted with the Telegraph, but is not widely expected to make a play. An Irish link is most likely to come courtesy of David Montgomery instead.
From Bangor, Co Down, Montgomery is a veteran newspaper executive and investor who now leads local and regional news group National World, whose journalists went on strike last month over low pay and low morale. He was another disappointed party in 2004, when he led a bid by private equity group 3i.
Who else is there? Not the soon-to-retire Rupert Murdoch. News Corp is said to be chasing The Spectator magazine, another wing of the Barclay empire currently being auctioned off by Lloyds.
But the rest of the lads are here: hedge fund founder and GB News investor Paul Marshall, former Telegraph editor Will Lewis, former MailOnline editor-in-chief Martin Clarke and Czech billionaire Daniel Kretinsky have all been mentioned, separately, in dispatches.
The Barclay family, meanwhile, would like to get its mitts back on the group, with Sky News reporting last week that it had rounded up some wealthy Abu Dhabi-based investors to table a bid valuing the group at a Lloyds-pleasing £1 billion.
The upshot – and a somewhat amazing one in light of the collapse of the print market since 2004 – is that the Telegraph Media Group is now tipped to fetch more than the £665 million paid by the Barclays.
Print circulation decline, what print circulation decline? The paper might seem like a broadsheet from a bygone age, but it’s one with more than one million mostly digital subscribers, turnover of £254 million and annual pretax profit of £39 million.
Such numbers, combined with the political influence that owning the right-wing title undoubtedly brings, have duly inspired some of the newspaper industry’s wealthiest men to put in the requisite calls to their financiers. The print news business may be heading towards its sunset, but certain newspaper-owning companies still glimmer more than enough for some.
