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Lloyds Banking Group takes control of The Telegraph

telegraph newspaper
telegraph newspaper

Lloyds Banking Group has taken ­control of the Telegraph Media Group (TMG) in an unprecedented move by a bank in modern times.

The lender has appointed receivers to manage the group while investment bankers run an auction which is expected to draw interest from rivals, wealthy individuals and funds potentially linked to Gulf states.

Lloyds has been in dispute with the Barclay family, who have owned The Daily Telegraph since 2004, over debts to its Bank of Scotland subsidiary, allegedly approaching £1 billion, which were secured against the publisher.

In a day of fast-moving developments, Lloyds seized a Bermuda-based entity in the Barclay family business which is a parent company to The Telegraph and The Spectator magazine.

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The change of control is expected to have no impact on the operations of The Telegraph or its staff.

The receivers also confirmed that the publisher is not entering administration and is in good financial health.

Nick Hugh, TMG’s chief executive, told staff: “I want to assure you all that this is a successful, profitable business. I am confident we will continue to grow and prosper.”

Aidan Barclay, 67, who had been chairman, and his brother Howard, 63, were removed from the board of TMG along with their associate Philip Peters.

The receivers, a specialist consultancy called AlixPartners, installed two new non-executive directors to represent Lloyds.

They said they would “consider alternative strategies to repay a facility ... that remains in default despite extensive discussions to resolve the situation... which may involve sales of the Telegraph and Spectator businesses”.

The receivers were on Wednesday in talks to appoint an independent chairman in an attempt to signal that Lloyds does not intend to exert undue influence over The Telegraph while a new long-term owner is sought.

Senior Conservative figures and City grandees were due to be approached to help Charlie Nunn, Lloyds chief executive, and Robin Budenberg, the chairman, navigate what they hope will be a brief role in a high-profile and politically sensitive business.

Potential bidders include German publisher Axel Springer and Belgian group Mediahuis which have both been seeking UK targets.

Springer lost out to the Barclay family’s £665 million bid for The Telegraph in 2004, and to a Japanese publisher which bought the Financial Times.

William Lewis, a former editor of The Telegraph, now an entrepreneur with The News Movement, is expected to enter the process with private backing.

DMGT, the publisher of the Daily Mail, has been widely suggested as a potential buyer. Wealthy individuals likely to consider a bid include Paul Marshall, who owns GB News.

Gulf states have shown an interest in British media assets in the past.

The Barclay family said on Wednesday night that a resolution of their dispute with the bank remained possible. Their spokesman said: “We hope to come to an agreement that will satisfy all parties.”

Lloyds declined to comment.