The Daily Telegraph was on Tuesday night sold to the Barclay brothers, the billionaire owners of the Ritz hotel in London, ending months of uncertainty for Britain’s best-selling upmarket newspaper.
The Barclays are paying £665-million for the Telegraph Group, which also includes the Sunday Telegraph and the Spectator magazine.
The success of the Barclays’ bid was a remarkable comeback by the reclusive twins, David and Frederick.
An earlier agreement to win control of the newspaper by doing a behind the scenes deal with the disgraced tycoon and former Telegraph boss, Conrad Black, had backfired badly.
Hollinger International, the company that owns the Telegraph titles, is in bitter dispute with Lord Black and blocked his deal with the Barclays in a US court earlier this year.
However, the twins are understood to have raised their bid by tens of millions on Tuesday morning to beat their rivals, led by former Mirror boss David Montgomery.
The Hollinger International board, meeting with financial advisers in New York on Tuesday, decided that the renewed Barclays all-cash offer was the best on the table.
The auction finally came down to two bidders; the other was the venture capital firm 3i, advised by Montgomery, in a consortium with the American finance firm Veronis Suhler Stevenson.
They are understood to have bid £650-million.
Gordon Paris, Hollinger International’s chief executive, said the papers ”will be in good hands, with people who understand the business”.
Journalists at the Daily and Sunday Telegraph titles as well as the Spectator magazine are likely to be pleased with the outcome of the bid. The Barclays are regarded as relatively benign owners who are prepared to keep the paper for a long time.
However, their management plans for both titles are relatively unknown, in particular the position of Andrew Neil, the former Sunday Times editor, which has not been clarified. He took no part in takeover discussions which were handled by Aidan Barclay. The deal does not close until the end of July.
The Barclays built their fortune in property and shipping and also own the Littlewoods retail business. They live in a castle on their private island of Brequou, in the Channel Islands.
But despite being publicity shy the Barclays have long-harboured ambitions to become newspaper barons.
They already own the Scotsman, Scotland on Sunday, the Edinburgh Evening News and continue to pump money into the Business newspaper through their company Press Holdings. They supported the European for years before it finally closed.
In January, David Barclay issued a statement saying the twins would not interfere with the Telegraph’s right-wing political agenda, after he appeared to indicate otherwise in a Guardian interview.
The biggest uncertainty remains Lord Black, who controls over 70% of Hollinger International and could still prevent the deal from happening.
The board of Hollinger International began a review of the company’s newspaper assets and invited bidders for the Telegraph eight months ago, as the dispute with Lord Black erupted into the open.
At the time, the company said it had uncovered at least $32-million of payments to Lord Black, other directors and his holding company Hollinger that not been authorised.
Lord Black stood down as chief executive, agreed to pay his share of the money back and support the auction of the newspapers. Instead, he immediately began negotiating with the Barclay brothers to sell them his controlling stake.
The fight between Lord Black and Hollinger International has since escalated. Hollinger International recently filed a renewed legal claim for $1,25-billion, alleging that Lord Black and cohorts treated the company like a ”cash cow” to support their lavish lifestyles. Lord Black has denied any wrongdoing and sued Hollinger International for defamation. – Guardian Unlimited