Telegraph titles set to be sold after Lloyds calls in receivers

UK bank to seek sale of media group over almost £1bn in debts owed by Barclay family

The Daily and Sunday Telegraph newspapers and the Spectator magazine will be put up for sale after their parent company was forced into receivership by the Lloyds Banking Group over £1bn of debts owed by the Barclay family, who own the titles that have dominated rightwing media discourse in the UK.

The bank has put B.UK, a Bermudian-based holding company that ultimately controls the Telegraph Media Group, into receivership, Lloyds confirmed on Wednesday. AlixPartners has been appointed as receiver at B.UKIn a personal blow to the family, Aidan Barclay and Howard Barclay, the sons of the late Sir David Barclay, have been removed as directors of TMG and The Spectator.

Their defenestration is part of a series of changes to the boards of companies connected to B.UK, which AlixPartners said was to “secure control of the assets”. It said this would help secure a resolution “which may involve sales of the Telegraph and Spectator businesses”.

Sir Frederick Barclay and his brother David acquired the Telegraph newspapers in 2004. The family loans were acquired by Lloyds with the takeover of ailing lender HBOS in 2008, and have since been written down as bad debts.

The debts are close to £1bn, bigger than previously reported, according to people familiar with the situation. They are held in a complicated cascade of offshore holding companies that ultimately control the Barclay family media assets.

TMG itself will not be put into administration.

The family was still trying to rescue the assets on Wednesday, but those close to the talks said Lloyds had lost patience with the situation. “The bank is moving very fast and very aggressively,” one person said. The lender said that it remained “willing to continue discussions” with the family.

The Barclays said in a statement: “We hope to come to an agreement that will satisfy all parties. As AlixPartners made clear, this situation is in no way related to the financial health or performance of the Telegraph or Spectator businesses”.

There is not expected to be any financial impact on Lloyds as the loans have long been classed as impaired, according to a person familiar with the situation. This means any proceeds will be written back on the British bank’s books.

The scale of the debts suggests that Lloyds would struggle to recover the full value of the loans, given that analysts estimate the titles are worth between £500mn and £700mn.

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One person close to Lloyds said this was not a “fire sale”; it is yet to appoint a bank to oversee any transaction.

Lazard is advising Lloyds on options for the business. Lazard declined to comment.

Lloyds’ Bank of Scotland unit said in a statement: “The decision to appoint receivers is an act of last resort and follows numerous discussions with B.UK’s parent company, Penultimate Investment Holdings Limited (PIHL).

“The aim of these discussions, which were held over a long period and undertaken in good faith, had been to find a consensual solution and repayment of PIHL’s borrowing to Bank of Scotland. Unfortunately, no agreement could be reached, which prompted the appointment of receivers.”

A sale would mark the end of a storied ownership of the Telegraph newspapers by the Barclay brothers. The twins acquired the Daily Telegraph for about £665mn after fighting off competition from Daily Mail owner DMGT,

German publisher Axel Springer and private equity groups led by former Mirror chief executive David Montgomery.
In a message to Telegraph staff on Wednesday, chief executive Nick Hugh said he was confident the newspaper would “continue to grow and prosper”.

TMG has attracted interest from potential buyers in the past, albeit a formal sale has never been confirmed. Rival media groups such as DMGT have been interested, according to former executives, although any such deal would be scrutinised by the competition authority. Czech energy tycoon Daniel Křetínský also looked at buying the broadsheet in 2020.

Other potential bidders could include Mediahuis, the publisher that already owns the Dutch De Telegraaf and the Irish Independent. The latter is chaired by Murdoch MacLennan, the former chief executive at the Telegraph.

Analysts have also speculated over bids from wealthy right-leaning City grandees such as Paul Marshall, who owns a large stake in GB News.

Saudi and other Middle Eastern wealth funds have also expressed interest, according to media analyst Claire Enders, although she said they could face opposition from the UK government in owning an influential UK media group.

Enders said the sale of the Spectator magazine could be more straightforward. She said that Rupert Murdoch’s media group — among others — would be interested in acquiring the influential British political magazine, and was less likely to face the sort of antitrust scrutiny that would come with a bid for the wider Telegraph group.

In the year ending January 2, TMG reported sales of £245mn, up from £235.2mn, and a pre-tax profit of £29.6mn, compared with £22.1mn the previous year.

A spokesman for the Barclays said: “The businesses within our portfolio continue to trade strongly, are run by independent management teams, are well capitalised with minimal debt and strong liquidity. They have no liability for any holding company liabilities, continue to operate as normal and are unaffected by issues in the holding company structure above them.”

Other parts of the Barclays’ business empire, including online retail group Very, are unaffected by Lloyds’ move. Restructuring experts are also carefully monitoring other parts of the business, however. Carlyle, the private equity firm, has taken a stake in the debt behind the Very Group, according to people familiar with the situation.