The race to capture The Telegraph and associated assets grinds on in fund boardrooms and SW1 back room talking shops. Guido brings you the latest whispers from the rumour mill…
Guido has already reported on Paul Marshall’s potential bid, which could join forces with David Montgomery’s National World bid – though other partners are in the running for Marshall. Other horses rumored or confirmed to still be in the race include:
A key talking point is the timetable. Access to the data room has not yet been granted – and most bidders will hold their cards close to their chests until they have inspected the state of the internal numbers. Speculation about the date of the general election may push the timetable forwards – with uncertainty over ownership impacting editorial operations. It will be critical for any buyer to be able to navigate inevitable Competition & Markets Authority interest. Moreover, the winning bid will need a mix of strong capital backing, editorial credibility and to pass the litmus test of media world gossip, Which mainly consists of hundreds of hacks nervously clucking about their jobs.
Guido has not confirmed the rumour that Steve Bannon indicated his interest to the Barclays and was told not to even bother trying to bid. It’ll take an experienced media hand, not just a money man, to pull off this deal…
GB News bankroller and investor, Sir Paul Marshall, is interested in making a bid for the Telegraph Media Group. According to Sky News‘ Mark Kleinman, Marshall has hired investment bankers to advise on the move, although sources “close” to Marshall – who also funds UnHerd – tell Kleinman he “hasn’t yet made up his mind” on the move. Hiring investment bankers suggests he’s got more than just a passing interest…
The Spectator is also in play, although Guido hears Rupert Murdoch has his eyes on that prize. If Marshall wants both, he’ll have to pay up. Even then, the Barclay family are still putting up a fight; The Times reported last month that Nadhim Zahawi is acting as a middle man to help the Barclays retain the titles, with Zahawi himself appointed chairman of the group if he successfully brokers a deal with the UAE. Either way, someone’s going to have to open their wallet…
The Telegraph have quietly corrected an article by Iain Duncan Smith published in March, after press watchdog IPSO (Independent Press Standards Organisation) ruled IDS had written an “inaccurate” claim about home schooling after Covid. The offending claim has since been deleted entirely from the text…
The article previously contained the following sentence:
“Some children are now being schooled at home. Whilst a number will be receiving a good education, sadly evidence shows that’s not true for the majority.”
According to IPSO, that evidence doesn’t actually exist. The Telegraph have now added:
“This article previously reported that evidence showed the majority of children schooled at home did not receive a good education. This was inaccurate as there was no available evidence to support the claim. This correction has been published following an upheld ruling by the Independent Press Standards Organisation.”
IDS is obviously right to push for improving children’s education. Kids are better off inside the classroom than outside it. Always best to show your workings though…
The Barclay family aren’t going down without a fight. According to Mark Kleinman, they’ve tabled an offer to Lloyds to write off a portion of their colossal £1 billion debt and retain control of the Telegraph and Spectator’s holding companies. Apparently Lloyds aren’t having any of it, and are rejecting the bid…
A spokesperson for the family said talks “remain ongoing” and they “hope to come to an agreement that will satisfy all parties“. The Barclays’ holding companies are already in receivership and Lloyds are reportedly determined to sell them off for a hefty price tag of around £600 million, which seems ambitious to Guido. Even if they get that, they’d still be owed £400 million by the Barclay family…
Statement from AlixPartners, the receivers over shares in B.UK Limited
“Alastair Beveridge and Ben Browne of AlixPartners have been appointed by Bank of Scotland as receivers over the shares in B.UK Limited, a holding company within the Penultimate Investment Holdings Limited (PIHL) Group which indirectly owns the Telegraph Media Group Limited (TMG) and The Spectator (1828) Limited (The Spectator). Bank of Scotland has made this appointment under its rights as a lender, to consider alternative strategies to repay a facility with PIHL that remains in default despite extensive discussions to resolve the situation.
Despite further discussions, a resolution could not be reached. Following their appointment, the receivers initiated changes to the boards of certain subsidiaries of B.UK Limited including TMG and The Spectator to secure control of the assets of the PIHL Group in order to facilitate a resolution, which may involve sales of the Telegraph and Spectator businesses. Meanwhile, the Bank remains willing to continue discussions with PIHL.
Independent directors Stephen Welch and Boudewijn Wentink have been appointed to the boards of Ellerman Investments Ltd, TMG and The Spectator. Nicholas Hugh and Richard Neal remain in place as directors of TMG. Aidan Barclay, Howard Barclay and Philip Peters have been removed as directors of Ellerman Investments Ltd, TMG and The Spectator, and Rigel Mowatt has been removed as a director of The Spectator.
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. In the meantime, the day to day running of all operating subsidiaries held by B.UK Limited will continue as normal.”
If the Telegraph goes to an open auction, there are likely to be trade bidders who will be focused on the profit and loss account and not over-bidding like the Barclays did. They will sweat the asset.
There will also be other bidders who will view it as a prestige trophy asset giving them influence over public life and politics. Who can afford to pay the price?
Some names in the frame for forming a syndicate include billionaires Peter Hargreaves, Peter Cruddas and Paul Marshall. Arron Banks might be tempted back into the fray in a syndicate. Maybe Narayana Murthy might fancy diversifying out of information technology into media and making the paper’s editorial line more sympathetic to his son-in-law? A look down the list of big Tory donors might give a clue as to potential members of a syndicate…
The Spectator could be spun out from the Telegraph – it makes solid profits (circa £2 million), and could function as a stand alone asset. A management buyout, perhaps with external financial backers, could be a possibility. Lord Ashcroft was rumoured to have contemplated offering £20 million for the magazine some years ago, Guido suspects it will go for more like double that to a trophy buyer…
