Who is in the running to buy The Telegraph?

After 19 years of being owned by Sir Frederick Barclay, his late twin Sir David Barclay and their extended family, the Daily and Sunday Telegraph newspaper titles are up for sale.

Also up for grabs is The Spectator, one of the UK's most influential news magazines.

The assets are for sale after Lloyds Banking Group apparently grew tired of waiting for the Barclay family to repay long-standing loans made by Bank of Scotland - now part of Lloyds - that date back to before the global financial crisis. It seized control of the titles' parent firm and placed it in the hands of receivers.

The auction will attract much interest. The Telegraph is effectively the in-house newspaper of the Conservative Party. Avidly read by its activists and MPs, the papers enjoy huge influence over the direction taken by the party, making the titles hugely attractive to those who would wield that influence.

Dominic Cummings, the former aide to Boris Johnson, revealed in July 2021 that the then-Prime Minister would refer to the Telegraph titles as his "real boss".

However, with a mooted price tag of at least £600million, only a handful of would-be buyers are likely to be able to seriously entertain thoughts of acquiring these rare assets.

Widely seen as the favourite is the Daily Mail & General Trust, owner of titles such as the Daily Mail, Mail on Sunday, The I and Metro, as well as magazine titles such as New Scientist. DMGT, controlled by the family of Lord Rothermere, has long been seen as a prospective buyer of the Telegraph titles but is thought in the past to have been deterred by the price the Barclays were asking.

Analysis by Press Gazette suggests DMGT enjoyed a 39.15% share of the daily newspaper market in the UK in 2021 with the Barclay family interests enjoying a 4.66% share. That might give grounds for the Competition and Markets Authority to block a combination.

The competition might also make difficult a takeover by News UK, the UK publishing arm of Rupert Murdoch's News Corporation, whose titles around the world include The Wall Street Journal, The Times, The Sunday Times, The Sun, The New York Post and The Australian. The same Press Gazette analysis gives News UK a 25.77% share of the market.

It has been suggested that, to get around the competition issue, News UK might consider selling The Sun. The only problem is that such a solution would not get around the fact that, crucially, The Times and Telegraph titles compete directly in what used to be described as the broadsheet market. They are far and away the biggest titles in that market segment and so bringing them together under one roof could be difficult - although, were a sales memorandum to be published, News UK will obviously be expected to take a look.

A senior News UK executive said: "People ask me from time to time whether I am interested in buying the Telegraph. I always tell them: 'I bought it this morning - and I will be buying it again tomorrow morning'."

It has also been suggested that, in the event of being locked out of an auction for the Telegraph titles on competition grounds, News UK might satisfy itself with The Spectator. Mr Murdoch is known to admire Fraser Nelson, the magazine's editor, who earlier in his career was a reporter on the business desk of The Times. The 'Speccie' would certainly be a prestigious addition to News UK's stable of publications.

Competition concerns

Not that it is by any means guaranteed that the CMA might block a sale to either DMGT or News UK. Many in the industry feel that the competition dynamics in the industry have changed given the entrenched decline in print circulations and the fact that the online editions of Britain's newspapers face intense competition, not only from outlets like Yahoo News and aggregator sites like Google News and Bing News, but also from the digital platforms of what have traditionally been seen as broadcasters - BBC News, ITV News and Sky News.

These changing dynamics were reflected in the way that Reach - owner of the Daily and Sunday Mirror, the People and many of Britain's leading regional newspaper titles including the Manchester Evening News, the Liverpool Echo, the Bristol Post and the Birmingham Mail - was allowed to buy the Daily Express, Sunday Express and Daily Star by competition watchdogs back in 2018.

Other trade buyers could include Axel Springer, owner of Germany's biggest selling newspaper Bild and also of Die Welt, one of the country's biggest 'quality' titles as well as being Europe's biggest magazine publisher. It tried to buy the Telegraph titles in 2004, when it lost out to the Barclays, while more recently it was outbid by the Japanese publisher Nikkei for the Financial Times in 2014. It has expressed its continued interest in buying the Telegraph titles in the recent past but is currently licking its wounds after an ill-fated investment in Purplebricks, the hybrid estate agency, in which it lost its entire €143million investment. It may not be in the mood to embark on another UK acquisition so soon.

Then there are potential buyers who, like the Barclays in 2004 when they acquired the Telegraph, are wealthy individuals. The former Conservative Party treasurer and City grandee Lord Spencer certainly has the financial wherewithal to buy the titles. But Lord Spencer, who made his £1.1bn fortune founding the interdealer broker Icap, has many other business interests and may feel a bid for the Telegraph too time-consuming. Another wealthy enough to buy the titles is Paul Marshall, the Brexit-supporting hedge fund millionaire, whose current media interests include GB News and the commentary website UnHerd. He, though, is thought to be more focused on his philanthropic interests.

A better bet might be Lord Cruddas, the billionaire founder of the trading platform CMC Markets and a former co-treasurer of the Conservative Party. He is also active with a charitable foundation, as well as remaining chief executive of CMC, but may feel the Telegraph titles to be a perfect vehicle to amplify the aims of the Conservative Democratic Foundation, the group he set up last year to campaign greater party democracy, many of whose supporters favour the restoration to power of Mr Johnson.

Another potential buyer, according to The Times, could be William Lewis, the former editor-in-chief of the Telegraph, who was responsible for the MPs expenses scoop in 2009. The Times reported today that Mr Lewis, who went on to become chief executive of Dow Jones and the Wall Street Journal before setting up his own business the News Movement, "is in talks to secure backing for a bid".

And a wildcard potential buyer could be Daniel Kretinsky, the billionaire Czech investor, who is a major shareholder in Royal Mail, J Sainsbury and West Ham United FC. He is said to have looked into buying the Telegraph titles in 2020.

One would-be buyer that can probably be ruled out is Mediahuis, the Belgian publishing group whose assets include the Irish Independent and De Telegraaf, the best-selling newspaper in the Netherlands. Its chairman is Murdoch MacLennan, a former chief executive of the Telegraph, but he remains deeply unpopular among senior employees at the titles and his return could spark mass resignations.

Perhaps the figure to watch most closely in all of this is Nick Hugh, the current Telegraph chief executive, who has deftly overseen the group's evolution into a broader digital business and protected the profitability of the Telegraph titles by introducing a subscription model even as print circulation - in common with the rest of the industry - fell sharply. Many of the would-be buyers will want to retain his services while some private equity firms may be tempted to sound him out about heading a takeover approach of their own.

Finally, the Barclay family itself cannot be ruled out. As Sky's Mark Kleinman reports today, it is seeking to restructure the debt it owes to Lloyds, with a view to retaining the Telegraph titles.

Having been removed from the Telegraph board and seen the indirect holding company for the business tipped into receivership by Lloyds, though, the family's timing may be ever-so-slightly out.

-sky news