ICYMI: Telegraph’s $750 mln price implies vanity contest
. Britain’s biggest lender appointed AlixPartners as receivers to recover some value, which could involve auctioning off the influential right-of-centre titles.
The good news for Lloyds is that TMG, run by Nick Hugh, has recently been profitable and growing. Revenues rose 4% in the most recently reported financial year, which ended in January 2022. EBITDA hit 40 million pounds, up 5%, based on UK filings, while borrowings were minimal. The debt load behind the Lloyds spat sits at the parent company of the Barclay family, the group’s long-time owners. Sir Frederick Barclay and his late brother David bought the titles almost two decades ago.
Lloyds reckons the price tag could be as high as 600 million pounds, according to media reports. That’s hard to justify. Assume revenue kept rising at 4% last year, as it did in the previous one, and TMG would have had a top line of 255 million pounds in the financial year ending in January 2023. Listed peer Reach
, owner of the Daily Mirror and other UK newspapers, trades at 0.4 times 2022 revenue. On that basis, TMG’s value including debt would be just over 100 million pounds. Granted, Reach is shrinking while the Telegraph’s digital subscription business offers the chance for continued growth. Lloyds and AlixPartners will no doubt make a different valuation case. It helps that they have precedent in recent sales of well-known media brands. Japanese media group Nikkei bought the Financial Times in 2015 for 2.5 times the previous year’s revenue. Exor
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