The auction of the Telegraph newspapers and the Spectator titles has been paused after an Abu Dhabi-backed consortium pledged to repay debts owed by their publishing group’s previous owners, the Barclay family.
RedBird IMI, a joint venture between the American firm RedBird Capital and International Media Investments of Abu Dhabi, announced on Monday that it had stepped in to provide loans to the family, allowing them to pay off their debts to Lloyds Banking Group.
Lloyds put the publishing group’s parent company, Bermuda-based B.UK, into liquidation in June over £1.1bn of unpaid debts, and a sale process officially launched in October. However, RedBird IMI’s announcement has cast uncertainty over the future of the auction process, which is being led by bankers at Goldman Sachs, with first round bids due to be lodged by 28 November.
The Barclay family has until 1 December to complete due diligence with Lloyds and RedBird IMI and repay the debts, ahead of an adjourned court hearing in the British Virgin Islands which would liquidate a company linked to the media group.
On Tuesday, B.UK said that “the boards of the parent companies of Telegraph Media Group Limited and The Spectator (1828) Limited announce that sales processes for each of the businesses shall be paused today until after the next court hearing scheduled for 4 December”.
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 said that it planned to convert the loan into equity at “an early opportunity”.
The agreement with RedBird IMI, led by former CNN president Jeff Zucker, would be scrutinised by regulators, including potentially the Competition and Markets Authority and Ofcom, if – as appears likely – the culture secretary, Lucy Frazer, issues a public interest intervention notice.
If the Barclay family has not repaid the debts by 4 December, it is not expected to oppose the liquidation of the holding company. A sale process would then resume.
Several suitors are understood to be interested in buying the titles, including 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 and National World, the publisher.
The Telegraph titles were bought by Sir Frederick Barclay and his late twin Sir David in 2004.
