The Barclay family is making a renewed effort to convince Britain’s biggest high street lender to regain control of the Telegraph newspapers by restating an offer to repay the bulk of the debt it owes to the bank. Sky News has learned that the newspapers’ former owners wrote to Lloyds Banking Group again last week, offering to settle the debt for £1bn.
Lloyds responded by informing the Barclays that they could either repay more than £1.1bn of borrowing in full, or participate in a recently launched auction of the broadsheet newspaper titles. The latest exchange comes after months of negotiations in the wake of Lloyds’ decision to appoint receivers to take charge of the Telegraph and Spectator magazine’s ultimate holding companies.
A court hearing in the British Virgin Islands, which was adjourned last month, is due to resume in the coming weeks with little sign that either side is prepared to give sufficient ground to resolve the matter. In October, Sky News revealed that the Barclays had made the £1bn offer, supported by a financing guarantee from First Abu Dhabi Bank, which Lloyds had rejected in favor of pursuing a formal sale process for the two influential media assets.
Talks orchestrated by Goldman Sachs have now begun with prospective buyers, including Sir Paul Marshall and other potential bidders such as Lord Rothermere and the London-listed media group National World. The new board of the Telegraph holding company has established an incentive plan to keep key employees motivated during the sale process, with collective financial rewards totaling millions of pounds.
Lloyds’ decision to press ahead with an auction, expected to generate bids of around £600m, has angered the Barclays amid suggestions that the sources of their funding could prompt ministers to launch a probe on public interest grounds. The newspapers were chaired by Aidan Barclay until June, with the family’s debt to Lloyds also including some funding tied to Very Group, the Barclay-owned online shopping business.
The Telegraph and Spectator disposals are being overseen by a new crop of directors led by Mike McTighe, the boardroom veteran who chairs Openreach and IG Group, the financial trading firm, who has been appointed chairman of Press Acquisitions and May Corporation, the respective parent companies of TMG and The Spectator. Both Lloyds and a spokesman for the Barclay family declined to comment.