The former owners of The Daily Telegraph have secured financing from unnamed Gulf backers based in Abu Dhabi to buy back approximately £1bn of debt owed to Lloyds Banking Group, according to exclusive information obtained by Sky News. The proposal offered to purchase the debt for around £500m to £600m, representing a significant discount. Despite this offer, Lloyds is reported to have rejected the bid and plans to hold a full auction of the newspaper, its sister publication, and The Spectator magazine. The Barclay family, who took control of the media group in 2004, has consistently demonstrated their determination not to permanently lose control.
Recent negotiations between Lloyds and the Barclays have centred on refinancing loans made by HBOS prior to its 2008 rescue during the banking crisis. The newspapers were previously chaired by Aidan Barclay, nephew of Sir Frederick Barclay, who, along with his late brother Sir David, orchestrated the takeover of the Telegraph. The Barclays also own Very Group, an online retailer, and previously owned the Ritz hotel in London. Earlier this summer, Sky News reported that the family had instructed bankers to sell Yodel, the parcel delivery group they own. The Barclays are being advised by investment bank Houlihan Lokey.
Despite Lord Rothermere, the proprietor of the Daily Mail, expressing interest in a potential deal, the Barclays have emphasized that their proposal offers a “clean” solution to Lloyds and seeks to avoid any regulatory investigation that may be triggered by another media group acquiring the Telegraph. A sale for approximately £600m would result in a significant return for Lloyds, which previously wrote down the value of its loans to the Barclays. However, concerns about media ownership and the sale occurring prior to a general election remain. Lloyds’ CEO, Charlie Nunn, stated that there is no need for a rushed sale process and that the aim is to maximize returns for shareholders.
Potential suitors for the Telegraph titles include National World, a regional newspaper publisher led by industry veteran David Montgomery, as well as hedge fund tycoon Sir Paul Marshall, who is also a major investor in GB News, and Czech businessman Daniel Kretinsky. Last month, Telegraph Media Group (TMG) reported a 33% increase in pre-tax profits in 2022.
The sale will be overseen by a new set of directors, with Mike McTighe, chair of Openreach and IG Group, leading the board. McTighe has recently been appointed chairman of Press Acquisitions and May Corporation, the parent companies of TMG and The Spectator (1828).
Representatives for the Barclay family and Lloyds declined to comment on Saturday.