Lloyds Banking Group will auction the Telegraph and Spectator magazines as soon as this week despite a new attempt by the Barclay Family to stall the process with a higher offer of £1bn.
Barclays has made several attempts over the summer to regain the control of the Telegraph Media Group. The group was taken by Lloyds when the family did not repay more than £1.2bn in debts that had been accumulated behind the business for decades.
Two people with knowledge of the situation estimate that the latest bid will be worth around £1bn. Analysts estimate that this is more than the value of the Telegraph at auction.
According to sources close to the situation, Goldman Sachs is still in charge of the formal sale process.
The Barclay family has been in talks with Abu Dhabi sovereign investors to back their offer, but they still question the source of financing.
People close to the bid process report that government officials privately warned against selling the ownership of the important national newspaper to Middle Eastern investors. Some suggested only a minor stake would be acceptable.
The Barclay family’s offer is likely to be used for to pay off the debts of the group that have been written off significantly on Lloyds books rather than to participate in the auction.
Some people who are familiar with the process wonder why the Barclays don’t use the money they have to compete in the auction against rivals rather than make a preemptive deal.
One added that the higher bid will still test Lloyds’ commitment to continue the auction process if they have greater confidence in the bid details.
According to one source, the proposal was not submitted via Goldman Sachs who was hired to oversee the sale, but directly to Lloyds by the family. Sky News was the first to report that the family offered £1bn.
The slow pace of the Telegraph’s introduction to the market has frustrated potential bidders. Several have said that a deal must be completed before the UK election next year.
The competition watchdogs and the media, as well ministers at Downing Street would have to approve any successful offer, adding further delays.
A number of media companies have expressed interest in either the Telegraph or the Spectator. These include UK rival DMGT and German publisher Axel Springer. Rupert Murdoch News UK has also registered its interest, as well as National World, led by David Montgomery. Sir Paul Marshall, and Sir William Lewis are also preparing bids.
A spokesperson for Barclay Family said: “The Barclay family continues to seek a resolution that is mutually acceptable with Lloyds Banking Group in regards to the media assets.”
Lloyds has declined to comment.
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