Abu Dhabi-backed fund says it will take over Telegraph and Spectator
An Abu Dhabi-backed investment fund said yesterday it would take control of the Telegraph and the Spectator after agreeing loans to repay debts owed by their publishing group’s previous owners, the Barclay family. The deal would entail a joint venture between the US firm RedBird Capital Partners and Abu Dhabi’s International Media Investments (IMI) providing loans to the family, allowing them to pay off their debts to Lloyds Banking Group and take back the publications within weeks. However, sources close to the situation said the auction of the titles – which began in June after the Barclays lost control of the group over £1.16bn of unpaid debts owed to Lloyds – was continuing. It emerged last week that the family intended to fully repay their debts with funding from Abu Dhabi. However, Conservative MPs voiced concerns at the weekend over the danger of foreign influence, asking the government to use national security laws to investigate potential risks around the bid. RedBird IMI said yesterday it had “reached an agreement to provide a package of loans to the Barclay family allowing them to pay off their debt to Lloyds Bank in full and bring the Telegraph and Spectator out of receivership”. Under the terms of the agreement RedBird IMI would provide a £600m loan, secured against the Telegraph and Spectator, and “a loan of a similar amount secured against other Barclay family businesses and commercial interests”. RedBird would then have an option to convert the loan secured against the Telegraph and the Spectator into equity, and said it “intends to exercise this option at an early opportunity”. It said: “Any transfer of ownership will of course be subject to regulatory review and we will continue to cooperate fully with the government and the regulator.” RedBird is run by Jeff Zucker, one of the best-known media executives in the world, having been the CNN president for nine years. He left the broadcaster last year. The Manchester City owner Sheikh Mansour bin Zayed, the deputy prime minister of the UAE, has reportedly been directly involved in the funding of the deal. It is understood that if the Barclay family can prove they can pay in full by early December, Lloyds would be obliged to accept. The deadline for first-round bids in the auction process, which is being run by the US bank Goldman Sachs and directors for the parent companies of the Telegraph and Spectator, is on 28 November. Flint Global – the public affairs firm founded by Ed Richards, a former boss of the communications regulator Ofcom – is advising RedBird IMI, according to a Sky News report. A collection of suitors have been circling the newspaper group since the auction formally began in October. They include a consortium led by Sir Paul Marshall, the hedge fund boss who is a shareholder in the GB News channel, as well as the owner of the Daily Mail and the Metro. The agreement is expected to come under regulatory scrutiny. The culture secretary, Lucy Frazer, could issue a public interest intervention notice that would lead to the deal being scrutinised by the competition watchdog, the Competition and Markets Authority. If the CMA decides to deepen its investigation, the move could be referred to Ofcom. The government launched an investigation in 2019 into the sale of stakes in the Independent and Evening Standard to an investor with strong links to Saudi Arabia. A group of Conservative MPs – including the former health minister Neil O’Brien – have written to Frazer; Oliver Dowden, the deputy prime minister; and the business secretary, Kemi Badenoch, expressing concerns over the Barclays’ Abu Dhabi-backed deal. RedBird IMI added: “Following transfer of ownership, RedBird Capital alone will take over management and operational responsibility for the titles under the leadership of RedBird IMI chief executive Jeff Zucker. International Media Investments will be a passive investor only. “RedBird IMI are entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications, and believe that editorial independence for these titles is essential to protecting their reputation and credibility.” The Barclay family and Lloyds Banking Group declined to comment.