The reclusive Barclay Brothers look set to take control of the Daily Telegraph after agreeing a £260 million deal to buy the global newspaper group headed by troubled media mogul Lord Black.
The billionaire brothers are understood to have reached an “irrevocable” agreement to take over Hollinger Inc, in a move that will see them assume control of a large group of titles including The Daily Telegraph, The Sunday Telegraph and the Chicago Sun-Times.
The agreement to sell the titles followed news that Lord Black has been ousted as non-executive chairman of Hollinger Inc with immediate effect. The company is launching legal proceedings against the media magnate for a series of alleged unauthorised payments (see Hollinger Chairman Could Be Ousted).
The takover deal will give the Barclay Brothers control of more than 75% of shares in Hollinger International. However, its completion is still dependent on the agreement of other shareholders and tender is still theoretically in progress.
The company said in a statement today: “The board of directors has received a letter with respect to the intended takeover of Hollinger Inc. The company and the board intend to review the offer and its implications.”
Sir David Barclay, who along with his brother has built a business with annual revenues of almost £4 billion, claims the deal would bring an end to months of damaging publicity surrounding the beleaguered Lord Black and his company.
He said: “We believe this continued media controversy is significantly harming the public image and stock price of Hollinger International and is undermining its credibility in the financial markets. As part of the acquisition, the negative media attention should cease.”
The Barclay Brothers already have a stake in the national newspaper market and their interests include The Scotsman, Scotland on Sunday and The Business. The deal to take control of the Telegraph titles will significantly increase this stake and looks likely to come under scrutiny of media super-regulator Ofcom.
The takeover will also cut short the ambitions of other major media players thought to be interested in the Telegraph titles. Richard Desmond’s Express Newspapers and Lord Rothermere’s Daily Mail & General Trust have expressed their enthusiasm, along with as many as fifty other interested parties (see Big Guns Could Be Ruled Out Of Race For Telegraph Titles).
The Barclay Brothers are not expected to seek boardroom roles at Hollinger International, or to pursue any takover bid for the operating company itself. However, speculation suggests they might push for a change of editor at the Daily Telegraph, with Jeff Randall, the BBC’s business editor, being named as a potential candidate.
