Magazine article The Spectator

Lord Hollick Is Prepared to Sell, and He Has a Prospectus That Proves It

Magazine article The Spectator

Lord Hollick Is Prepared to Sell, and He Has a Prospectus That Proves It

Article excerpt

The Express is not for sale. That has been the official line of Lord Hollick, the chief executive of United News and Media, which owns the Express titles and the Daily Star. Of course, no one really believed him, but until now there has been no clear evidence that he was being rather economical with the truth.

I mentioned three weeks ago that the Barclay brothers were sniffing around the Express. I am told they want it badly. The only issue is price. With that in mind, Kleinwort Benson, bankers to United News and Media, has been preparing a comprehensive information package of 'financials' for perusal by the Barclays. The thing has been at least a month in the writing, but should be with the brothers and their advisers very soon.

If you aren't thinking of selling something, you don't generally go to the trouble of producing a fancy prospectus complete with graphs, asset valuations and cash-flow forecasts. But that does not necessarily mean that Lord Hollick will sell the titles. For although the Barclays undoubtedly want to acquire them, they may not be prepared to pay as much as Lord Hollick wants. I don't know what figure Kleinwort Benson has in mind,. but I wouldn't be surprised if it were 350 million or even more. That is an awful lot to pay for three titles in long-term decline, which are probably not making more than about 15 million a year between them, and are in need of investment of at least 50 million.

It could be that Lord Hollick is going through the motions. He knows that some of his investors believe that United News and Media should get rid of the Express titles. Even though these. account for less than 10 per cent of turnover, they are seen as a drag on the company and its share price. On the other hand, the papers give Lord Hollick a special standing in government circles, for they have embraced the Blairite cause. His wallet may tell him that he should get rid of them, but his heart begs him to hang on at least until the next election. He may be hoping that Kleinwort Benson comes up with an unacceptably high valuation. That would allow him to tell his investors that he was prepared to sell the asset but that unfortunately no one was able to buy it.

But then, of course, the Barclays may pay over the odds, though it is not in their interests to let such an idea get around. Proper negotiations have not yet begun -- there have been what are described as 'encounters' - and will not do so until Kleinwort Benson produces its figures. But it seems to me that Lord Hollick is taking a risk by putting the titles in play. Even if he doesn't want to get rid of them, he may find it difficult to keep control of the plot. I repeat: the Barclay brothers do want them very much. Incidentally, Andrew Neil, their editor-in-chief, seems not to be in danger of being marginalised, as some people think he is. Bert Hardy, chief executive of the Barclays' newspapers, has been ill, and may not want to return full-time to his demanding job. In that case Mr Neil would be left virtually in sole day-to-day charge of the newspapers. Whatever happens, he is almost bound to have editorial control at the Express, if the Barclays get hold of it.

Will they? I find this difficult to read. I am pretty convinced that United News and Media will not own the Express titles in, say, two years' time, but whether it will sell them before then, it is not easy to say. I rather think the Barclays will get control sooner or later. …

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