A deal that will bring Abu Dhabi-backed investors a step closer to taking control of the Telegraph and Spectator magazine could be agreed as soon as Friday, the BBC understands.
The titles were taken over by Lloyds Bank as it sought to recover £1.1bn owed by the owners, the Barclay family. An Abu Dhabi-backed firm this month agreed to pay the sum and take control.
It is not clear yet if the deal will be scrutinised but sources said it was “unlikely” to be blocked. Under the terms of the deal, the Barclay family is expected to transfer ownership of the influential titles to IMI Redbird, an investment group backed by the ruling family of the United Arab Emirates (UAE).
People close to the controversial transaction said they thought it was “highly unlikely” the government would prevent a UK bank from collecting its debts – or prevent a creditor facing the threat of rising interest payments from repaying a loan.
However, the planned transfer is expected to come under inspection by the government, which has the power to intervene in transactions on specified public interest grounds. Culture Secretary Lucy Frazer has already indicated she is “minded” to issue a Public Interest Intervention Notice (PIIN).
Former Telegraph editor Charles Moore and senior conservative politicians including William Hague have also voiced grave concerns about the influential Tory-friendly titles falling into the ultimate ownership of a foreign state.
The UAE's Sheikh Mansour would be taking a financial risk by advancing money to pay off the Barclays debts when it is uncertain that his company would be able to take ownership of the assets.
One person close to the situation said that was “a risk they seemed prepared to take”. Sources close to Lloyds Bank said they should be permitted to collect on their debts. They said the ongoing issues over eventual ownership and editorial independence were not a matter for the bank.
The repayment of the debt would effectively end an auction process initiated by Lloyds to reclaim some of their debts. Bidders for the titles had included hedge fund tycoon and GB News owner Paul Marshall and the Daily Mail owner DMGT.
Former CNN chief Jeff Zucker, the front man for IMI Redbird, has accused rivals of “throwing darts” and “slinging mud”. He has insisted that the current editorial independence of the publications would be assured by robust organisational structures.
IMI Redbird is being advised by Ed Richards, the former head of media regulator Ofcom. The United Arab Emirates is already a significant investor in the UK and is on a short list of bidders to take a stake in a new nuclear power station at Sizewell in Suffolk.
Sheikh Mansour is also the owner of the Manchester City football team. The deal for the Telegraph, Sunday Telegraph and Spectator values the publications at around £600 million. The United Arab Emirates will also take a more than £500m charge over the other assets of the Barclay family, which include the Very retail group.
At a high-profile global investment summit on Monday at Hampton Court, attended by representatives of the UAE, investment minister Dominic Johnson told the BBC that the UAE was an “important enthusiastic and strategic investor in the UK”.
He declined to comment on the Telegraph situation insisting it was a matter for Department for Culture, Media and Sport (DCMS).
— CutC by bbc.com
