Who are the billionaires battling for the Telegraph and Spectator?
The auction for both the Telegraph Media Group (TMG) and Spectator is underway, drawing the attention of a host of eager bidders. But regulatory hurdles could thwart some potential suitors.
Earlier this year, Lloyds Banking Group seized control of the right-leaning publications from the Barclay family, who were unable to settle their debts of over £1bn to the lender. Analysts estimate that TMG could fetch a bid of up to £600m.
The auction, managed by Goldman Sachs, was initially expected to commence in September but officially began on October 20th.
Lloyds is reportedly eager for a swift sale, hoping to conclude before the anticipated 2024 general election. There is speculation that the sale process could wrap up much sooner though, potentially closing this year.
So, who is in the running?
A long line of wealthy individuals, entities and consortiums have tossed their hats into the ring to buy the iconic British publications.
DMGT
The British media company Daily Mail General Trust (DMGT), the owner of the Daily Mail and The Mail on Sunday, is one contender. DMGT may form a new company with other interested parties to act on behalf of shareholders.
Analysts at Enders Analysis have called DMGT the “most highly touted UK trade buyer” for the Telegraph group.
But regulatory concerns could arise if a takeover bid raises public interest issues. For instance, if it threatens the diversity of views in newspapers, the Competition and Markets Authority (CMA) may step in.
A Press Gazette analysis suggested that acquiring The Daily Telegraph would give DMGT more than 50 per cent control of the daily national newspaper market in the UK.
Although, when looking at the share of how people consume news in the UK, a recent Ofcom consumer survey found DMGT represented four per cent, compared to BBC’s 29 per cent, ITV’s six per cent and Facebook’s nine per cent.
Such concerns could lead to a Public Interest Intervention Notice (PIIN), which initiates an inquiry by Ofcom and the CMA.
Alex Haffner, competition partner at UK law firm Fladgate, said “where a trade buyer is concerned, it would be looked at very closely by the regulators concerned (CMA and Ofcom).”
“This is particularly so in relation to DGMT given that any acquisition by it of ‘control’ over Telegraph Media Group would result in a significant share of the daily newspaper market, as well as the closely related advertising market,” Haffner added.
The Barclay family
The Barclay family, who once owned The Telegraph, are determined to regain control of their papers.
They recently made a surprise offer to Lloyds Banking Group, worth £1bn, funded by an anonymous member of a United Arab Emirates royal family.
Industry sources told City PM that the fresh Barclays bid has thrown a spanner in the works, potentially expediting any agreement with Lloyds, and causing irritation among other hopefuls.
MP Danny Kruger has urged culture secretary Lucy Frazer to issue a PIIN into the funding behind the Barclays’ efforts to repay their debts to Lloyds Banking Group.
In a letter to Frazer, he wrote: “If material influence over, or control of, a quality national newspaper was passed to an unknown foreign ruler at any time it would raise concerns, but at a heightened time of geopolitical turmoil I believe it is more important than ever that this deal for a treasured national asset is given proper scrutiny.”
Sir William Lewis and the Murdoch empire
In addition to DMGT, other possible buyers include former Telegraph editor Sir William Lewis, who has secured funding to potentially reacquire the publication, which he wants to give a digital revamp.
Rupert Murdoch is another media mogul with his eye allegedly on The Spectator for a strategic expansion in the US market, aligning with his right-leaning News Corp media brands.
Outsider bets
Royal Mail and Sainsbury’s investor, Daniel Křetínský – also known as the Czech Sphinx – has expressed interest in The Telegraph’s auction process, possibly as a minority stakeholder.
Sir Paul Marshall, co-founder of Marshall Wace hedge fund, is leading a bid for The Telegraph, collaborating with investment bank Moelis and with US billionaire Ken Griffin. They are eyeing up a US expansion.
German publisher Axel Springer has registered interest in The Telegraph, reviving memories of its unsuccessful 2004 bid. Axel Springer’s portfolio includes major German titles like Bild and Die Welt, with a global presence spanning 40 countries.
There are also rumours of Martin Clarke, former Mail Online editor-in-chief, assembling a consortium with a focus on maximising digital growth opportunities.