A pioneering figure in the newspaper industry has publicly expressed interest in acquiring The Telegraph following its takeover by Lloyds Banking Group. David Montgomery, a veteran newspaper executive and former editor of The News of the World, announced that his company, National World, is considering a bid for the media group. This disclosure, though not required by City authorities, can simplify conversations with potential financiers and ensure compliance with insider information regulations.
The Telegraph was acquired by Lloyds through the appointment of receivers from AlixPartners, a specialist consultancy firm. The bank obtained court approval for this unconventional measure after a lengthy dispute over debts exceeding £1bn owed to the Barclay family, who had owned the publisher since 2004. An auction of The Telegraph, managed by Goldman Sachs, is expected to commence formally in September.
National World, listed on London’s junior Aim market with a value of £48m, would undergo significant expansion if it were to successfully acquire The Telegraph, which is estimated to be worth between £200m and £1bn. In comparison, National World’s pre-tax profits last year amounted to £5m, while The Telegraph recorded pre-tax profits of £39m. The financial details of a potential bid were not disclosed.
National World’s largest shareholder is Media Concierge Holdings, an Irish direct marketing provider and the largest local newspaper publisher in Ireland. The company, controlled by British entrepreneur Malcolm Denmark, is known for its extensive cost-cutting measures. David Montgomery, following a career as a journalist, served as CEO of Mirror Group and founded Mecom, a highly leveraged London-listed company that acquired European newspapers in the 2000s. In recent years, he successfully transformed and revalued Johnston Press into National World by implementing budgetary constraints and investing in digital platforms.
The interest in acquiring The Telegraph aligns with National World’s growth strategy of expanding through acquisitions and implementing a new operating model. However, David Montgomery’s cost-cutting approach and influence have generated criticism from journalists, resulting in conflict at National World. As news of the company’s interest in The Telegraph emerged, the National Union of Journalists announced a ballot for industrial action.
National World’s declaration of interest is likely to fuel speculation about potential joint bids that could overcome regulatory obstacles. For example, a bid from DMGT, the publisher of The Daily Mail, may face a lengthy review to assess its impact on media plurality, reducing its appeal to Lloyds. Collaborative bids could mitigate this risk and share the financial burden.
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