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Abu Dhabi-backed fund says it will take control of Telegraph and Spectator

Abu Dhabi-backed fund says it will take control of Telegraph and Spectator

The Abu Dhabi-backed investment fund RedBird IMI has said it is to take control of the Telegraph and 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 and International Media Investments of Abu Dhabi 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 kicked off earlier this year 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 on Monday 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”.

The terms of the agreement are that 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 Spectator into equity, and said it “intends to exercise this option at an early opportunity”.

“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,” it said.

RedBird is run by Jeff Zucker, one of the most well-known media executives in the world, having been CNN president for nine years. He left the broadcaster last year.

Sheikh Mansour bin Zayed Al Nahyan, the deputy prime minister of the UAE and owner of Manchester City football club, 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 will be obliged to accept. A source close to the situation said: “We have been here before.”

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 next week, on 28 November.

Flint Global – the public affairs firm co-founded by Ed Richards, a former boss of the UK 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 launched 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.

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The RedBird agreement is expected to come under regulatory scrutiny. The culture secretary, Lucy Frazer, could issue a public interest intervention notice, which would lead to the deal being scrutinised by the competition watchdog, the Competition and Markets Authority. If the CMA decided 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, as well as the deputy prime minister, Oliver Dowden, 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.

“We are excited by the opportunity to support the titles’ existing management to expand the reach of the titles in the UK, the US and other English-speaking countries.”

Separately on Monday, Lloyds applied to liquidate a company linked to the media group at a court in the British Virgin Islands. A judge adjourned the hearing.

The Barclay family and Lloyds Banking Group declined to comment.


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