Barclays won Telegraph by raising their bid at last minute
The purchase of the Telegraph group by the Barclay brothers is believed to have rescued the paper from a controversial plan to turn the
Sunday Telegraph titles into a seven-day news operation.
The purchase of the Telegraph group by the Barclay brothers is believed to have rescued the paper from a controversial plan to turn the Daily and Sunday Telegraph titles into a seven-day news operation.
Sources at the Telegraph group said yesterday that an attempt to buy the titles by the finance group 3i would have seen the journalistic staffs of the famous newspapers merged.
The result would have been considerable cost savings but would have raised questions about the future of many of the journalists, particularly those working on the Sunday paper.
One Telegraph executive claimed that the acceptance of the 3i bid, which was being advised by David Montgomery, the former chief executive of the Mirror Group, would have been "a disaster" for the Telegraph.
"There's no doubt it would have become a seven-day operation. The Sunday would have ceased to exist in its current form," he said. "The only way to achieve what they wanted - which was flotation of the Telegraph group on the Stock Exchange within two or three years - was to slash and burn and run the papers on a much lower budget."
It emerged yesterday that as late in the auction process as last Saturday Mr Montgomery sought to woo the group's two newspaper editors - Martin Newland of the Daily Telegraph and Dominic Lawson of the Sunday Telegraph - by inviting them to a meeting hosted by Lazard, the bank that was overseeing the auction of the group on behalf of the previous owners, Hollinger International.
It is understood that the editors were told that it was felt that they had not been sufficiently included in the negotiations on the future of the newspapers and that they and other senior executives on the titles could expect to benefit from incentives packages if the 3i bid was successful.
Telegraph group sources suggested that even as late as Wednesday that the 3i offer was in pole position, only for the Barclays, who have been pursuing ownership of the newspapers since 1985, to raise their bid. At a meeting of the board of Hollinger International on Monday it was decided to accept the Barclays' offer of £665m.
The sum, described yesterday as "a trophy asset price", was £400m more than the brothers had agreed with the former Hollinger chairman, Lord Black of Crossharbour, late last year to buy his stake in the company.
But yesterday Lord Black, through his holding company Hollinger Inc, which has 30 per cent of the shares and 72 per cent of the voting rights of Hollinger International, threatened to block the sale to the Barclays, questioning whether it represented the best value to shareholders.
The Barclays have pursued the Telegraph group for nearly 20 years, first approaching Lord Black with an offer to buy him out when he owned a quarter of the papers back in 1985.
Although senior executives at the Telegraph group described the acceptance of the Barclays' offer as the "best outcome possible", some of the staff were more cautious in their response.
Members of the National Union of Journalists working on the titles have called an emergency meeting today to discuss the implications of the sale.
There is some concern that a bitter Richard Desmond, owner of Express Newspapers, might exact revenge for his own failure to acquire the Telegraph titles by forcing it out of the east London printworks that the two companies share. Staff were advised yesterday that the Telegraph group was confident that such a move would be beyond the financial resources of Mr Desmond.
There was a widespread expectation within the group that the Sunday Telegraph editor Dominic Lawson - who is on friendly terms with the Barclays - will be offered the editorship of the daily. One news executive on the title said: "Dominic does want it. He realises how big a job it will be but he would be up for the challenge."
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