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Barclay twins clinch Telegraph

Guardian Unlimited | The Guardian | Barclay twins clinch Telegraph

Heather Tomlinson and Dan Milmo
Monday January 19, 2004
The Guardian

The secretive multimillionaire Barclay brothers began a £260m takeover yesterday to buy the group that controls the Daily and Sunday Telegraph from Lord Black.

The move came shortly after Lord Black was ousted as chairman of the Telegraph's parent company, Hollinger International, amid a barrage of lawsuits about his conduct at the firm, and marks the end of his 18-year reign as proprietor of the rightwing establishment's favourite paper.

Sir Frederick and Sir David Barclay, owners of a £4bn media and leisure empire, are two of the richest men in the UK. Known for their reclusive nature, they run an empire that includes the Ritz hotel in London, the Littlewoods retail chain and the Scotsman.

Since the start of December, Lord Black has been talking to the brothers about selling them his controlling stake in Hollinger Inc, conducting negotiations by phone before he agreed the deal after a face-to-face meeting in New York on Saturday night. Yesterday, the twins said they would look for ways of "putting together" the Telegraph titles and their existing newspapers, including the Business, which could involve joint distribution or printing deals.

Hollinger's assets, which include the Jerusalem Post, the Chicago Sun-Times and The Spectator magazine, as well as the Telegraph titles, were, in effect, put up for sale following a shareholder revolt against Lord Black last year.

More than 100 expressions of interest are thought to have been received for the papers, with potential buyers of the Daily Telegraph including the Daily Mail and General Trust, and Richard Desmond, the owner of Express Newspapers.

But yesterday's surprise deal seems to have outflanked the Barclays' rivals, who are now expected to abandon their plans. However, Mr Desmond and Hollinger each own half of Westferry printers, which prints the Telegraph titles. Mr Desmond could now wrest control of the print works, which would be a blow to the Telegraph group.

The Barclay brothers are reported to be donors to the Conservative party, but are not as involved in the editorial side of their publications, in contrast to the "hands on" approach of Lord Black. Their political beliefs will be taken into consideration if the government asks the media industry regulator, Ofcom, to investigate the takeover.

All newspaper acquisitions can be subjected to a "public interest test" following new media ownership rules last year.

Lord Black controlled the newspaper titles through a complex structure with his holding company, Ravelston, at the top of the pyramid. Ravelston owns the majority of the New York-listed Hollinger Inc, which in turn controls the Telegraph's parent, Hollinger International. The deal yesterday involves the Barclays buying Hollinger Inc. On Friday, Hollinger International launched a lawsuit against Lord Black, Ravelston and others, asking for the return of more than $200m (£110m) taken through "improper means".

The US financial regulator, the Securities and Exchange Commission, has also asked a court to allow investigations to go on into Lord Black's conduct, irrespective of change of control.

It as yet unclear how this might affect the sale.

Sir David wrote to the Hollinger International board from a Monaco address yesterday. He offered to send his son, Aidan Barclay, to meet them to discuss the plans and said he would pay back any money owed to Hollinger International by Hollinger Inc, one of the demands of the lawsuits the company faces.

He also said the new ownership would end the "negative media attention" that had focused on Lord Black's relationship with the company.

Lord Black repeatedly denied wrongdoing in connection with the lawsuits over his role in Hollinger International.

January 18, 2004 at 11:10 PM in World Affairs | Permalink | Top of page | Blog Home