The sale of the Daily and Sunday Telegraph and The Spectator magazine could take weeks or even months to resolve, bankers warned on Thursday, due to regulatory issues and concerns about the complex finances of the business.
AlixPartners have seized the assets in a row about loan payments to Lloyds Bank, which in turn has hired storied City bank Lazard to oversee a process that is unlikely to be straightforward.
With a complex corporate structure and various levels of holding companies, experts say potential buyers will need a forensic examination before they can put a true value on titles that, while prestigious, have suffered in the digital age.
Jeremy Whiteson, restructuring and insolvency partner at city law firm Fladgate, said: “The appointment of receivers over the Bermudian ultimate holding company of Telegraph Media Group Limited and other Barclay family interests is an unusual step by the banks involved.”
There will also be regulatory hurdles to overcome, especially if one of the bidders is DMGT, the company behind the Daily Mail. Such a deal would raise competition issues.
Whiteson added: “If the banks have withdrawn its facilities, and the company is unable to meet its debt, directors would be exposed to claims that they were acting in breach of their duties by continuing to trade, and the company would be exposed to hostile creditor actions where creditors were entitled to accelerate their debts.
“Directors of the trading companies may well, therefore, be considering appointing administrators or entering a moratorium to create a breathing space and so permit a business sale to be concluded.”
Sir David and Sir Frederick Barclay paid £665 million for the group in 2004.
Aside from DMGT, names in the frame include Germany’s Axel Springer, which owns Bild and Die Welt. According to The Times, former editor Will Lewis is trying to secure financing from the City to fund a bid, while Paul Marshall, the hedge fund king behind GB News, might make inquiries. Jeff Bezos, the Amazon founder who owns the Washington Post, has also been speculatively mentioned as someone who might take an interest.
AlixPartners said: “The receivership over the shares in B.UK Limited is in no way related to the financial health or performance of the Telegraph or Spectator businesses and we do not anticipate any operational changes to the businesses or their employees. Neither the Telegraph Media Group nor The Spectator are entering administration.”
