Business

Lloyds spars with Barclay family over latest £1bn Telegraph exchange

The Barclay family has renewed its efforts to persuade Britain’s biggest high street lender to regain control of the Telegraph newspapers after restating an offer to repay the bulk of the debt it owes to the bank.

Sky News understands that the newspapers’ former owners wrote to Lloyds Banking Group again last week to repeat an offer to settle the debt for £1bn.

Lloyds is said to have responded immediately by informing the Barclays that they could either repay more than £1.1bn of borrowing in full, or participate in a recently launched auction of the broadsheet newspaper titles.

The latest exchange between the two sides comes after months of negotiations in the wake of Lloyds’ decision to appoint receivers to take charge of the Telegraph and Spectator magazine’s ultimate holding companies.

A court hearing in the British Virgin Islands, which was adjourned last month, is due to resume in the coming weeks but with little sign that either side is prepared to give sufficient ground to resolve the matter.

Sky News revealed in October that the Barclays had made the £1bn offer, supported by a financing guarantee from First Abu Dhabi Bank, and that Lloyds had rejected it on the basis that it would pursue a formal sale process for two of the UK’s most influential media assets.

Talks orchestrated by Goldman Sachs, the investment bank, have now kicked off with prospective buyers, including Sir Paul Marshall, the hedge fund billionaire and GB News shareholder.

Other potential bidders include Lord Rothermere, the Daily Mail proprietor, who has also been in talks with Middle Eastern investors, and the London-listed media group National World.

The new board of the Telegraph holding company has established an incentive plan to keep key employees motivated during the sale process, with collective financial rewards totalling millions of pounds, Sky News revealed recently.

Lloyds’ decision to press ahead with an auction – which is expected to generate bids of around £600m – has angered the Barclays amid suggestions that the sources of their funding could prompt ministers to launch a probe on public interest grounds.

Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph 19 years ago.

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Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.

The family’s debt to Lloyds also includes some funding tied to Very Group, the Barclay-owned online shopping business.

The Telegraph and Spectator disposals are being overseen by a new crop of directors led by Mike McTighe, the boardroom veteran who chairs Openreach and IG Group, the financial trading firm.

Mr McTighe has been appointed chairman of Press Acquisitions and May Corporation, the respective parent companies of TMG and The Spectator (1828), which publish the media titles.

Both Lloyds and a spokesman for the Barclay family declined to comment.

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