UK

Goldman Sachs to run auction of The Telegraph

Lloyds Banking Group appointed receivers in June after dispute with the Barclay family

ByChristopher Williams, 

THE TELEGRAPH

BUSINESS EDITOR

28 July 2023

 
The investment bank Goldman Sachs has been appointed to run an auction of The Telegraph on behalf of Lloyds Banking Group.

Lloyds took ownership last month by sending in receivers. It had been in dispute with the previous owners, the Barclay family, over debts of more than £1bn secured against The Telegraph and The Spectator magazine, which was part of the same group of companies.

Goldman will act as lead financial adviser on auctions of The Telegraph and The Spectator, alongside legal advisers from the Magic Circle firm Linklaters, it was announced on Friday. Their appointments were made by the boards of the two parent companies, both of which are chaired by the City veteran Mike McTighe.

Lloyds chief executive Charlie Nunn said this week that he was in no rush to sell the titles because both are in robust financial health. However, preparations for the auctions are underway and bidding is expected to begin in September.

Despite Mr Nunn’s unhurried posture, senior politicians have publicly warned that the new ownership must be secured as soon as possible. Some have expressed private concerns about a bank owning a Conservatives-supporting publication in the run up to a General Election and the risk of a perception of conflicts of interest.

Goldman was appointed ahead of four other investment banks which pitched for the work. Experience in the rigorous running of high-profile sales, knowledge of the media sector and understanding of the potential regulatory and political pitfalls were all factors in the decision. Goldman is known for its political connections, not least in counting the Prime Minister as a former employee.

Last time The Telegraph was sold the auction was run by Lazard, which this time has a role advising Lloyds. Its long-standing relationship with DMGT, the owner of The Daily Mail and a potential bidder, is believed to have disqualified it from more direct involvement.

The sale of an influential news organisation can hit special regulatory hurdles including tests of whether the new proprietor might be counter to the public interests in media plurality, accurate news and free expression. The risk such rules might pose to some potential bids for The Telegraph is likely to play a significant role in how they are judged, alongside the sum offered.

Estimates for the value of The Telegraph have varied from as low as £400m to as high as £1bn. The uncertainty is partly caused by the facts that major news organisations very rarely change hands and the media landscape has been transformed by the internet since the Barclay family paid £665m for it in 2004.

Last year The Telegraph reported a pre-tax profit of £39m, up 32pc, on turnover of £254m, up 4pc.