Is inflation a concern? You bet. Especially for the twins poised to buy the Telegraph titles.
In January, the Barclay brothers appeared to have bought the business, including two national newspapers and the Spectator magazine, for £260 million.
Now, as the last men standing in the auction process, they are in line to pay somewhere a long way north of £650 million for the same assets. The price of the titles has thus rocketed by 250 per cent in five months, giving an annual inflation rate fit for post-war Germany.
The only thing that appears to be standing in the way of a Barclays-owned Telegraph is an offer from 3i, the venture capital group viewed as the outsider in the bidding. Reports this evening suggest the announcement may be made next week, with Hollinger having a board meeting in New York this weekend to rubber stamp a deal with the Barclay twins.
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But tcrease in the price highlights how important it was for Hollinger International, which owns the title, to go to court to break the original deal with the Barclays, which was struck with Lord Black of Crossharbour, the company’s former chairman.
It also reveals the premium investors are willing to pay for the prestige and authority which comes with high-profile media ownership. The Barclays, having revealed European ambitions, yet have been forced to retreat north of the border to The Scotsman, have at last the chance to influence a manageable UK-wide stage.
The question is why 3i, a listed business with responsibility to shareholders, is still in the running for assets which appears heartily overvalued. What is the business case for such a purchase?
Telegraph staff may welcome the near-certain victory by twins seen as patrician media magnates, although the presence in the shadows of their media-advisor-in-chief, Andrew Neil, may not be quite so welcome, nor the Barclay’s reputation in Edinburgh for trimming back costs and jobs.
Outsiders, however, will always wonder quite what Europe’s largest venture capital firm had in store.
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MIKE VERDIN