The sale of the Telegraph newspapers and the Spectator has kicked off, thwarting a last-ditch attempt by the Barclay family to shut down the auction with a blockbuster £1bn offer.
On Friday morning, the boards of the parent companies of Telegraph Media Group (TMG), the parent company of the Daily Telegraph and Sunday Telegraph, and the Spectator said that the advisers Goldman Sachs had launched a sales process for each of the businesses.
Earlier this week, the Barclay family tabled an offer valuing the Telegraph newspaper group at £1bn in an attempt to stop the sale process heading to an auction and deter rival bidders from challenging them.
The Barclays acquired the Daily and Sunday Telegraph and the Spectator in 2004 but Lloyds bank took control of the titles in June after the family failed to reach an agreement over more than £1bn in unpaid debt.
Lloyds resisted multiple previous proposals tabled by the Barclays, and the bank has been keen to see what value might be placed on an influential media asset such as the Telegraph in an open auction.
Analysts have put an expected price tag on the Telegraph titles of between £500m and £700m. TMG reported £39m in profits in its last annual financial filing. The Spectator could fetch as much as £70m.
Other potential bidders include Axel Springer, the German media company that lost out to the Japanese conglomerate Nikkei in the takeover battle for the Financial Times in 2015, the Daily Mail owner Lord Rothermere, and Sir Paul Marshall, the founder of the London-based hedge fund Marshall Wace and a minority investor in GB News.
Marshall is forming a consortium that includes the US hedge fund billionaire Ken Griffin.
There are also bids being put together by National World, which is run by David Montgomery, the former chief executive of the Mirror newspaper group, and Sir William Lewis, the former News UK, Dow Jones and Telegraph executive.
Rupert Murdoch’s News UK is considered a potential bidder for the Spectator.
A number of the bidders, including Lord Rothermere’s Daily Mail and General Trust and the Barclay family, are hoping to tap investors from the Middle East to support their bids.
However, only a minority holding by sovereign wealth-backed investors in such an influential asset is likely to be considered acceptable by the government, which has the power to block deals involving important national assets under the National Security and Investment Act.
Any deal to buy the Telegraph could also draw close scrutiny from the UK regulators Ofcom and the Competition and Markets Authority, including a public interest test and plurality and competition investigations, depending on who wins the auction.
