Barclay Brothers Take Control Of Telegraph Titles
The billionaire Barclay brothers have succeeded in their hard-fought battle to take control of the Daily Telegraph and its sister publications with a winning bid worth £665 million.
The reclusive media moguls, who own the Business and the Scotsman, saw off a rival bid from venture capital firm 3i and its US partner Veronis Suhler Stevenson in the final round of bidding.
The sale of the titles comes six months after the Barclays agreed a secret £260 million deal to buy the global newspaper group headed by troubled media mogul Lord Black. The deal was blocked by a Delaware judge in a move that led to the competitive auction of the Telegraph titles (see Barclay Brothers Agree Telegraph Takeover Deal).
Hollinger International had originally hoped to off-load the whole of its newspaper portfolio, which includes the Chicago Sun-Times and the Jerusalem Post. However, it soon became clear that buyers were focusing solely on the Daily and Sunday Telegraph and the Spectator magazine.
The Barclay brothers and 3i were the only bidders left after Daily Mail & General Trust pulled out saying that it could not afford the very rich price tag attached to the titles. German publisher Axel Springer had to drop out at an earlier stage for the same reason, along with Richard Desmond’s Express Newspaper Group (see Daily Mail Pulls Out Of Race For Telegraph Titles).
The Barclays were favoured as the most likely to take control of the titles due to their ability to find cost cuts through synergy with their existing UK newspapers. Attention will now turn to who will edit the Daily Telegraph.
Commenting on the landmark acquisition of the titles, Aidan Barclay, the son of Sir David, said: “We are delighted to be the new owners and look forward to working with the team to take the business forward.”
Jeremy Deedes, the deputy chairman and chief executive officer of the Telegraph Group, added: “We have ended up not just in safe hands, but with new owners who have a great track record for nurturing, developing and investing in their acquisitions.”
Reports suggest that the Barclay brothers’ winning offer represented a trophy price for the titles, which newspaper executives have said are worth no more than £550 million. However, the deal gives the brothers control of the UK’s highest circulating broadsheet newspaper, which, along with the Sunday Telegraph, accounts for 8% of the national newspaper market.
The Telegraph titles have seen circulation dip since their decision to end the practice of bulk sales. The latest monthly ABC results for May reveal a 1.9% decline for the Daily Telegraph and a slight 0.5% drop for its Sunday sibling (see Telegraph Group Puts And End To Bulk Sales).
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