- The Telegraph was put into receivership by Lloyds Banking Group this year
An Abu Dhabi-backed investment fund announced yesterday that it had struck a deal with the Telegraph’s owners that would ultimately see it take control of the prestigious national newspapers.
The Telegraph, which the Barclay family bought in 2004, was put into receivership by Lloyds Banking Group earlier this year as a result of unpaid debts of £1.1billion.
The bank has put the newspaper group – which controls the Daily and Sunday Telegraph titles and The Spectator, a 195-year-old Conservative-leaning political magazine – up for sale.
But the Barclay family has now offered to repay the debt using funding from the Abu Dhabi-backed investment fund RedBird IMI.
Yesterday the fund confirmed that it had agreed with the Barclays’ to take the titles out of receivership and ensure debts were repaid – in a deal which will ultimately see the ownership transferred to Redbird IMI.
The Telegraph, which the Barclay family bought in 2004, was put into receivership by Lloyds Banking Group earlier this year as a result of unpaid debts of £1.1billion (file image)
But there was no comment from Lloyds. It is understood the bank will need to carry out a due diligence process which could take a number of weeks and that in the meantime the sale process continues.
It came after a group of Tory MPs wrote to ministers urging them to intervene in the proposed takeover of the Telegraph papers in the Abu Dhabi-backed deal.
Former boss of Ofcom linked to bid to buy newspapers
A former boss of media regulator Ofcom is said to be acting as a behind-the-scenes lobbyist for the Abu Dhabi-backed fund behind the Telegraph takeover.
Ed Richards’ public affairs firm Flint Global is reportedly advising RedBird IMI on its deal with the papers’ owners the Barclay family.
Flint Global was chosen due to Mr Richards’ experience of dealing with so-called public interest intervention notices, probes by official watchdogs that have the potential to block deals, according to Sky News.
The firm concentrates on advising businesses on issues relating to policy and regulation.
Ed Richards’ (pictured) public affairs firm Flint Global is reportedly advising RedBird IMI on its deal with the papers’ owners the Barclay family
Mr Richards, 58, headed Ofcom from October 2006 to December 2014, before being succeeded by Sharon White, who is now boss of John Lewis.
He co-founded Flint Global in 2015 alongside Sir Simon Fraser, who had been permanent under-secretary at the Foreign Office and head of the Diplomatic Service.
Earlier in his career, Mr Richards advised then-prime minister Tony Blair as well as working in a senior strategy role at the BBC.
Flint Global did not respond to a request for comment last night.
The MPs, including Sir Edward Leigh and Sir John Hayes, said the arrangement ‘represents a potential threat to press freedom in this country’.
They expressed concern that ‘investment vehicles controlled or majority-funded by the Emirati royal family may soon gain control of or material influence over two of the most important media publications in Great Britain’.
RedBird IMI is partly funded by Sheikh Mansour bin Zayed Al Nahyan, the deputy prime minister of the UAE and owner of Manchester City football club.
The letter from the Tory MPs to Deputy Prime Minister Oliver Dowden, Business Secretary Kemi Badenoch and Culture Secretary Lucy Frazer argues that there is a ‘strong case for close scrutiny by the government’.
It argues that there would be grounds for this under a mechanism called a ‘public interest intervention notice’ and also under separate national security law.
‘Material influence over a quality national newspaper being passed to a foreign ruler at any time should raise concerns, but given the current geopolitical context, such a deal must be investigated,’ the letter states.
It points out that the United Arab Emirates, of which Abu Dhabi is part, sits in 145th place in the 2023 International Press Freedom Index compiled by the group Reporters Without Borders.
‘Clearly, this represents a potential threat to press freedom in this country,’ the letter says.
The Daily Mail and General Trust (DMGT) media group, which owns the Daily Mail, is among those that have been bidding to buy the Telegraph titles.
Yesterday, Redbird IMI – which is a joint venture between US firm RedBird Capital and International Media Investment of Abu Dhabi – said it would provide a loan of up to £600million, secured against the publications. IMI will provide a similar loan against other Barclay assets.
Under the deal, Redbird IMI has the option to convert the loan into equity ‘and intends to exercise this option at an early opportunity’.
‘Any transfer of ownership will of course be subject to regulator review, and we will continue to cooperate fully with the Government and the regulator,’ a spokesman said.
‘Following the 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.’ Mr Zucker is a former boss of US news network CNN.
IMI will be a ‘passive investor only’, the spokesman added. ‘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.’
IMI’s existing investments include The National newspaper and joint venture Sky News Arabia.
Redbird Capital’s investments include AC Milan football club and Fenway Sports Group, owner of Liverpool football club and the Boston Red Sox baseball team.