Sir David and Sir Frederick Barclay have dramatically scooped ownership of the Daily Telegraph in a £665m deal, after a year-long battle to achieve what they described as a “once in a lifetime opportunity”.
It is understood that the rival consortium – backed venture capital firm 3i and former Mirror Group chief executive David Montgomery along with Veronis Suhler Stevenson – bid £650m, leaving the Barclays narrowly in the lead.The decision was taken at a board meeting of Hollinger International in New York tonight, with word leaking out shortly after 11.15pm.
However, the deal has yet to be officially confirmed and may yet have to be ratified by US courts who are still trying to adjudicate in the long-running dispute between the Telegraph’s former proprietor Hollinger International and its major shareholder Conrad Black.
The drawn-out battle, which also saw Richard Desmond and the Daily Mail General Trust come and go, has meant the Barclays are paying more than double the price they originally offered for the Telegraph and its stablemates, the Sunday Telegraph and Spectator magazine.
Tonight’s announcement makes the Barclays, owners of the Ritz hotel and Littlewoods retail chain, the Telegraph’s first new owners for nearly 20 years.
The 149-year-old paper last changed hands in February 1986, when Conrad Black bought out the Berry family, which had owned it since the 1920s.
Tonight’s sale ends a long process that began seven months ago, when Lord Black stepped down as Hollinger’s chief executive.
The Canadian-born Tory peer has seen his publishing empire slip from his grasp as he faces allegations of stripping the company of money in unauthorised fees.
The deal gives the brothers – who own the Scotsman and the Business newspapers – their first major Fleet Street asset and catapults them into the premier league of press barons.
Top managers at the Telegraph will immediately be wondering about their future if the Barclays look to stamp their authority on their new properties.
The Telegraph’s editor, Martin Newland – who has stewarded what has sometimes seemed like a rudderless ship since being appointed in October – could be the first for the chop.
And the group’s management team, including editorial director Kim Fletcher and managing director Hugo Drayton, could be swept aside if the Barclays want to revamp the way the titles are run.
Contenders for plum jobs include former Barclays stalwarts, such as Andrew Neil; the BBC’s business editor, Jeff Randall; and Charles Garside, the ex-editor of the twins’ now defunct newspaper, The European.
The challenge now for the Barclays is to prove they have the proprietorial skills to match their deep pockets, if they are to turn round the Telegraph, which is losing readers despite remaining Britain’s top selling broadsheet.
The notoriously publicity-shy twins run their business empire from their castle on the private Channel island of Brecqhou, getting Sir David’s son, Aidan, to conduct face-to-face negotiations.
Investment bank Lazard presided over what has turned into the highest valued newspaper auction in history, pushing the asking price too high for the likes of the Express owner, Richard Desmond, and the German publishing group, Axel Springer.
The Barclays and 3i emerged as the only remaining bidders last week after the one time favourites, Daily Mail & General Trust, dropped out.
3i, which was advised by the former chief executive of the Mirror, David Montgomery, had put together a £650m deal with Veronis Suhler Stevenson, a New York-based merchant bank specialising in media assets.
But in the end it was the bid from the Barclays’ Press Holdings company that prevailed, and the brothers will now be keen to secure the backing of Lord Black, who tried to sell them his holding company, Hollinger Inc, back in January.
Although that deal was blocked, Lord Black is likely to have a say in the outcome of events as he has a controlling stake in Hollinger International.