Barclay brothers buy Telegraph group for £665m

The Barclay brothers have ended months of uncertainty about the future of the Daily and Sunday Telegraph by buying both newspaper titles in a multi-million pound deal.

Hollinger International last night announced it had accepted a £665m (€997m) offer from the Barclays instead of a rival bid from venture capital house 3i.

David and Frederick Barclay, who also own The Business, Scotland on Sunday and The Scotsman, had been seen as favourites to take control of the titles in a bidding war.

Among interested bidders in the Telegraph titles, which also includes The Spectator, were Express newspapers owner Richard Desmond and newspaper group Daily Mail & General Trust.

They both pulled out when the price tag rose leaving the Barclay brothers and a private equity consortium featuring UK group 3i as the remaining bidders in the auction.

Aidan Barclay, chairman of the Barclays’ holding company, Press Acquisitions, said: “We are delighted to have reached agreement for the purchase of the Telegraph Group, which comprises some of the great titles in newspaper publishing, and to have ended the uncertainty surrounding their future.

“We are looking forward to working with the management in running the business.”

Gordon Paris, interim chairman and CEO of Hollinger International, said: “We believe that the sale of the Telegraph Group at this time presents the best opportunity for us to maximise value for our shareholders.

“The Daily Telegraph, The Sunday Telegraph and The Spectator will be in good hands, with people who understand the business and will further enhance these great properties.”

Jeremy Deedes, deputy chairman and CEO of Telegraph Group, said: “This is the first day of a new life for the staff of the Telegraph Group, who have endured months of uncertainty with great resolve.

“I am confident that we have ended up not just in safe hands, but with new owners who have a great track record for nurturing, developing and investing in their acquisitions.”

Hollinger International, which also publishes the Chicago-Sun Times and the Jerusalem Post, announced it was first considering selling the company in November of last year when it was revealed Conrad Black was stepping down as its chief executive.

The announcement followed an internal inquiry into payments to executives, including Black, who denies any wrongdoing.

He is the main subject of a lawsuit from Hollinger International, which claims he used the newspaper as “a cow to be milked” of cash.

The Daily Telegraph reported today Black may use his 72% voting stake in Hollinger International to attempt to block the latest Barclays offer. He made no immediate comment.

Hollinger believes it does not need the permission of a majority shareholder to push the deal through, although this may be contested in the US courts.