The Barclay family briefly regained control of the Telegraph newspaper yesterday after Abu Dhabi-backed RedBird IMI helped repay its £1.2 billion pound debt to Lloyds Bank.
Lloyds’s statement confirming receipt of the funds was a masterclass in dry wit: “We are always keen to work constructively with customers who get into difficulty with their repayments to reach an amicable solution.”
This deal is not amicable. RedBird IMI immediately exercised its option to buy the Spectator and the Telegraph for £600 million, around the expected auction price.
But the transfer was pre-blocked by culture secretary Lucy Frazer last week with a public interest intervention notice allowing Ofcom and the Competition and Markets Authority to investigate competition, accuracy and freedom of expression issues. Ofcom has until the end of January to carry out its investigation.
It’s unclear how either body could stop the deal. “It is incautious of Number 10 to talk about capping Middle Eastern involvement at 30 per cent – we don’t have any legislation to this effect,” says Alice Enders, from Enders Analysis. “The UAE is a defence partner in the Middle East where there’s currently a war on.”
Sheikh Mansour bin Zayed Al Nahyan’s IMI is not a sovereign wealth fund. The UAE’s actual sovereign wealth fund Mubadala has a £10 billion defence and investment partnership with the UK and was recently approached by the government to take a 20 per cent stake in the Sizewell C nuclear power plant. There has been a bilateral investment treaty between the two countries since 1994 “for the promotion and protection of investments.”
If the transfer was blocked the auction is unlikely to simply restart. Goldman Sachs, which oversaw the auction, was appointed by the receiver, in turn appointed by Lloyds Bank. Lloyds has been paid so all three have left the building.
Meanwhile, US media reports suggest that Jeff Zucker, the former CNN boss who is leading the RedBird bid, has hired an unnamed Tory MP to sit on the Telegraph’s editorial board, plans to launch the paper in the US and to use the company to buy up any Murdoch assets that Lachlan may want to offload.
The deadline for Ofcom submissions is 13 December and both bodies report on 26 January 2024, but Zucker seems sure the deal is in the bag.