The Daily and Sunday Telegraph are to be put up for sale in a deal that promises to reshape the media landscape after the Barclay family lost control of their crown jewel media assets in a bitter row over nearly £1bn of unpaid debts.
The Bank of Scotland has appointed the firm AlixPartners as official receiver, to seize the shares owned by the Barclay family in the holding company that ultimately controls the national newspapers and the Spectator magazine.
A spokesperson for the bank said it had been left with no other choice but to put the publisher’s holding company into receivership, saying debts were default with “no sign they would be repaid”. It said discussions with the owners had been held “over a long period”, but that “no agreement could be reached”.
The bank, which has taken the action after becoming frustrated at the lack of repayment of loans worth close to £1bn, is seeking to remove Barclay family-appointed board members, replace them with independent directors, and move to auction off the Telegraph titles and the Spectator.
Among those being removed from the holding company, B.UK Limited, is Aidan Barclay, the chair of the newspaper group, who along with his brother, Howard, controls the family’s UK assets.
“Due to debts being in default and with no sign they would be repaid, Bank of Scotland was regrettably left with no other choice but to appoint receivers over B.UK. Limited,” the bank said in its statement.
“The decision to appoint receivers is an act of last resort and follows numerous discussions with B.UK’s parent company … The aim of these discussions, which were held over a long period and undertaken in good faith, had been to find a consensual solution … Unfortunately, no agreement could be reached, which prompted the appointment of receivers. While the receivers are now in place, the Bank remains willing to continue discussions to find a suitable solution.”
It is understood Bank of Scotland’s parent company, Lloyds Banking Group, which has reportedly appointed the firm Lazard and is considering hiring one other investment bank, wants to move swiftly to set up an auction for the titles.
Twin brothers David and Frederick Barclay bought the Telegraph Media Group (TMG), the parent of the newspapers, in a £665m sale in 2004. The family loans were bought by Lloyds as part of its takeover of HBOS during the financial crisis in 2008.
In 2019, when Frederick tested the water for a potential sale of the papers as part of a feud with David, who died in 2021, potential suitors were considering bids of about £200m.
Since then the Telegraph has improved its financial position, focusing on building its subscription base to more than 750,000 and returning to acquisition mode, recently buying the Chelsea Magazine Company. It reported profits of almost £30m last year.
The ultimate value of the Telegraph may depend on how much any buyer still perceives the powerful right-leaning titles as a “trophy” asset, making it potentially worth far more than its profits may indicate.
The looming prospect of a general election next year could appeal to any buyer hoping to influence public opinion in the run-up to the vote, with Labour way out in front of the Conservatives in polling.
Boris Johnson wrote a weekly column for the Telegraph before he became prime minister, receiving £23,000 a month for the role.
Potential suitors include DMGT – the owner of the Mail and Mail on Sunday newspapers, MailOnline, Metro and i – which has previously expressed an interest, although it would probably face regulatory scrutiny over competition issues.
Other possible bidders are thought to include the German publisher of Bild, Axel Springer; Sir Paul Marshall, co-founder of the hedge fund Marshall Wace; members of the Saudi and Qatari royal families; and Sir Jim Ratcliffe, the billionaire owner of Ineos, who has been linked to a takeover of Manchester United.
The Belgian group Mediahuis has also been linked to a deal. Its Irish arm of which is chaired by Murdoch MacLennan, a former chief executive of TMG. In the longer shot category is the Amazon founder, Jeff Bezos, who paid $250m (£200m) to buy the Washington Post in 2013, and was linked to a potential bid for the Telegraph in 2018.
The founder of Enders analysis, Claire Enders, said Rupert Murdoch’s News UK could be interested in buying the Spectator.
Jane Martinson, professor of financial journalism at City, University of London, said: “The patience of Lloyds Bank, left handling loans built up before the 2008 credit crisis, appears to be wearing thin. A forced sale of such a prized asset is hardly the outcome Sir David and Sir Frederick would have wanted when they fought off so many rivals for a paper considered the house organ of the Conservative party.”
A spokesperson for the Barclay family said: “The loans in question are related to the family’s overarching ownership structure of the family’s media assets. They do not, in any way, affect the operations or financial stability of TMG.
“The businesses within our portfolio continue to trade strongly, are run by independent management teams, are well capitalised with minimal debt and strong liquidity.”
Aidan and Howard Barclay, David Barclay’s sons, also control Ellerman Holdings, the holding company of the family’s UK assets, which include the online retailer Very and the delivery group Yodel.
The family sold the Ritz hotel in 2020 to a Qatari investor. The brothers also attempted to take control of three prestigious Mayfair hotels, Claridge’s, the Berkeley and the Connaught, but abandoned that plan in 2015.
AlixPartners said “a resolution could not be reached” over the loans but said “the bank remains willing to continue discussions”.
It 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.”
