The chief executive of the publisher of the Daily Telegraph and Sunday Telegraph has launched an extensive strategic review of the newspaper group.
Murdoch MacLennan, the chief executive of parent company Telegraph Media Group, announced the review in a letter which staff believed amounted to the first official confirmation of a forthcoming sale of the titles. Others see it as a precursor to a round of layoffs as the Telegraph, like its rivals, struggles to cope with a precipitous decline in print advertising and a difficult transition to a sustainable digital model.
TMG is using corporate consultancy firm Deloitte to undertake a review of the business. Rumours that owners, Frederick and David Barclay, are looking to sell the Telegraph have been circulating for several months. Typically, statements referring to such a major strategic review are taken as City code for options including a potential sale of a business.
The Barclay brothers are believed to be entertaining an unofficial “off-market” process to quietly test the potential interest in – and value of – the newspaper group. It is understood that the news of the process, which is not formal and will not necessarily lead to a sale, has prompted at least two interested parties to put out feelers in City circles. One City source referred to the situation as “very discreet and exploratory”.
The Barclays acquired the Telegraph for £665m in 2004 from Hollinger, the company previously controlled by Conrad Black. The business made profits of £46m in 2014, according to the most recent publicly available filing, but is likely to have seen margins worsen significantly last year as the national newspaper market experienced poor trading conditions.
The high price achieved by the Financial Times, which was bought by Nikkei for £844m at 35 times profits last summer, could also have been a factor in a decision to test market appetite for the Telegraph. Another City source said that the sale prompted unrealistic valuation expectations in the market, which would deter potential buyers.
A spokesman for the Barclay family said: “There are no plans to sell TMG or any part of it and there never have been.” A spokesman for MacLennan denied that the letter related to a potential sale or job cuts.