Telegraph court showdown to be adjourned after Barclays offer Lloyds £1.16bn
A court hearing to liquidate a Barclay family holding companies in order to smooth a sale of The Daily Telegraph is poised to be adjourned after a last-gasp offer to repay more than £1bn to Lloyds Banking Group.
Sky News understands that a hearing scheduled to take place in the British Virgin Islands on Monday is expected to be postponed while the bank considers the Barclays’ latest effort to end the auction of the broadsheet newspapers.
An application to adjourn the hearing was submitted late on Friday.
Sources said this weekend that the Barclay family hoped to deliver a full repayment of its long-standing debt to Lloyds by the end of the month.
The adjourned court hearing would be expected to take place shortly after that date if the Barclays do not succeed in repaying the £1.16bn.
Initial offers for the Telegraph and Spectator are due on 28 November, with the billionaire hedge fund tycoon Sir Paul Marshall and Daily Mail proprietor Lord Rothermere among the bidders.
Sky News revealed on Friday that RedBird IMI, an investment vehicle run by Jeff Zucker, the former CNN chief, is backing the Barclay family’s £1bn-plus bid to regain control of The Daily Telegraph.
RedBird IMI would lend approximately £600m to the family, with the balance of the debt being funded by a member of the Abu Dhabi royal family – said to be Sheikh Mansour bin Zayed Al Nahyan – the ultimate owner of a controlling stake in Manchester City Football Club.
If Lloyds is satisfied about the provenance and scale of the funding available to the Barclays, it would accept the debt repayment, thereby ending the auction process.
Mr Zucker’s credibility means that his partnership with the Barclays therefore has the potential to radically alter the dynamics of the Telegraph’s journey to new ownership.
Mr Zucker is one of the world’s most prominent media executives, having served as president of CNN for nine years before his departure last year.
Nevertheless, rival bidders and Conservative MPs have begun to raise questions about the appropriateness of the Telegraph being financed largely by Middle Easter investors.
Sir David Barclay (L) who died in 2021 and his twin brother Sir Frederick received knighthoods at Buckingham Palace in 2000
Neil O’Brien, the MP for Harborough, said on Friday: “The Telegraph and Spectator are two of our most prestigious publications.
“Naturally there’s interest from around the world in gaining control of them.
“I hope [the government] will scrutinise the financing and ownership structure of any deal closely and put them through the usual PIIN process.”
There have been repeated questions in recent weeks about whether bids for the influential and traditionally Conservative-supporting Telegraph newspapers financed by Gulf investors would trigger a government probe.
Danny Kruger, a backbench Conservative MP with links to another of the Telegraph bidders, the hedge fund tycoon Sir Paul Marshall, wrote to the culture secretary, Lucy Frazer, to urge her to issue a Public Interest Intervention Notice (PIIN) into the funding.
Lloyds, which forced the Telegraph and Spectator magazine’s holding companies into receivership more than five months ago, has been engaged in a long-running stand-off with the family over its borrowings.
The success of the Barclays’ offer to repay its debt in full to Lloyds will also rest on the outcome of RedBird IMI’s due diligence.
The Barclays have made a series of increased offers in recent months to head off an auction, raising its proposal last month to £1bn.
Lloyds, however, has repeatedly told the family and its advisers that they should either repay the debt in full or participate in the auction alongside other bidders.
Talks orchestrated by Goldman Sachs, the investment bank, have now kicked off with prospective buyers, who also include the London-listed media group National World.
The new board of the Telegraph holding company has established an incentive plan to keep key employees motivated during the sale process, with collective financial rewards totalling millions of pounds.
Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph 19 years ago.
Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.
The family’s debt to Lloyds also includes some funding tied to Very Group, the Barclay-owned online shopping business.
Ken Costa, the veteran City banker who advised the Barclay brothers on their purchase of the Telegraph in 2004 and counts the sale of Harrods to Qatar Holding among his other flagship deals, is acting as a strategic adviser to the family.
The Telegraph and Spectator disposals are being overseen by a new crop of directors led by Mike McTighe, the boardroom veteran who chairs Openreach and IG Group, the financial trading firm.
Mr McTighe has been appointed chairman of Press Acquisitions and May Corporation, the respective parent companies of TMG and The Spectator (1828), which publish the media titles.
In July, Telegraph Media Group (TMG) published full-year results showing pre-tax profits had risen by a third to about £39m in 2022.
A successful digital subscriptions strategy and “continued strong cost management” were cited as reasons for the company’s earnings growth.
“Our vision is to reach more paying readers than at any other time in our history, and we are firmly on track to achieve our 1 million subscriptions target in 2023 ahead of our year-end target,” said Nick Hugh, TMG chief executive.
Lloyds and a spokesman for the Barclay family declined to comment on Saturday.
Cineworld’s hedge fund backers are drawing up plans to return the cinema operator to the public markets amid continuing uncertainty about the future of dozens of its British sites.
Sky News has learnt that the company’s owners are at the early stages of considering a New York listing for the business, with the first half of 2026 considered a likely window for it to take place.
City insiders said that a flotation was likely to encompass Cineworld’s operations outside the UK, with the group’s board expected to consider a sale of the British operations at some point.
They cautioned, however, that no decisions had been reached and would not be for some time.
The fate of Cineworld’s business in the UK has been mired in uncertainty for months, with the company initially exploring a sale of it before turning to a restructuring plan which compromises many of its landlords and other creditors.
It has announced the permanent closure of six sites, but it emerged last month that nearly 20 more were at risk of being shut amid ongoing talks with property owners.
The restructuring plan is due to complete later this month, which some landlords have opposed over the fairness of its terms.
Documents circulated as part of the restructuring plan process highlighted the fact that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.
“Absent this funding, the UK Group would have been insolvent on a cashflow basis,” they said.
Other cinema operators, such as Odeon, are now poised to step in to take over small numbers of Cineworld’s other sites.
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The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.
Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
Read more:
Pizza Hut UK hunts buyer amid budget tax crisis
Former Tory minister eyes top job at football regulator
Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.
It delisted from the London Stock Exchange in August 2023, having seen its share price collapse.
In addition to the UK, Cineworld also operates in central and Eastern Europe, Israel and the US.
Cineworld has been contacted for comment.
A former Conservative cabinet minister has thrown his hat into the ring to become the inaugural chair of Britain’s new independent football regulator.
Sky News has learnt that Chris Heaton-Harris, who stood down as an MP at July’s general election, is among those who applied for the role ahead of a deadline on Friday.
Mr Heaton-Harris is himself a qualified football referee who has officiated at matches for decades.
A former Northern Ireland secretary and chief whip under Rishi Sunak and Boris Johnson respectively, he said in 2022 of his part-time career as a football official: “I took a [refereeing] course and that was it, I’ve been going ever since.
“Football has done wonders for me throughout my life so I would recommend it to everybody.”
Mr Heaton-Harris is among a large number of people who have applied for the role of chair at the Independent Football Regulator (IFR), according to officials.
A publicly available timetable for the search says that interviews for the £130,000-a-year post will end on 11 December, with an appointment expected in the new year.
It is the second time that the government has embarked on a search for a chair for the IFR after an earlier hunt was curtailed by the general election.
The role will be based at the watchdog’s new headquarters in Manchester and will require a three-day-a-week commitment.
The Football Governance Bill had its second reading in the House of Lords this week, as part of a process that will represent the most fundamental shake-up in the oversight of English football in the game’s history.
The Labour administration has dropped a previous stipulation that the regulator should have regard to British foreign and trade policy when determining the appropriateness of a new club owner.
The IFR will monitor clubs’ adherence to rules requiring them to listen to fans’ views on issues including ticket pricing, while it may also have oversight of the parachute payments made to clubs in the years after their relegation from the Premier League.
The top flight has issued a statement expressing reservations about the regulator’s remit, while it has been broadly welcomed by the English Football League.
The IFR’s creation will come with the Premier League embroiled in a civil war over Manchester City‘s legal battles emanating from allegations that it breached the competition’s financial rules.
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Next week, the 20 Premier League clubs will meet for a lengthy shareholder meeting, with a vote on amended Associated Party Transaction rules hanging in the balance.
The league needs 14 clubs to vote in favour for the rule changes to be passed.
Contrary to earlier expectations, however, a detailed discussion on a financial distribution agreement between the Premier League and EFL is unlikely to be on the agenda.
A Department for Culture, Media and Sport spokesperson said: “The process for recruiting the Independent Football Regulator chair is under way but no appointment decisions have been made.
“We do not comment on speculation.”
This weekend, Mr Heaton-Harris could not be reached for comment.
Pizza Hut’s biggest UK franchisee has begun approaching potential bidders as it scrambles to mitigate the looming impact of tax hikes announced in last month’s Budget.
Sky News has learnt that Heart With Smart (HWS), which operates roughly 140 Pizza Hut dine-in restaurants, has instructed advisers to find a buyer or raise tens of millions of pounds in external funding.
City sources said this weekend that the process, which is being handled by Interpath Advisory, had got under way in recent days and was expected to result in a transaction taking place in the next few months.
HWS, which was previously called Pizza Hut Restaurants, employs about 3,000 people, making it one of the most significant businesses in Britain’s casual dining industry.
It is owned by a combination of Pricoa and the company’s management, led by chief executive Jens Hofma.
They led a management buyout reportedly worth £100m in 2018, with the business having previously owned by Rutland Partners, a private equity firm.
One source suggested that as well as the talks with external third parties, it remained possible that a financing solution could be reached with its existing backers.
HWS licenses the Pizza Hut name from Yum! Brands, the American food giant which also owns KFC.
Insiders suggested that the increases to the national living wage and employers’ national insurance contributions (NICs) unveiled by Rachel Reeves would add approximately £4m to HWS’s annual costs – equivalent to more than half of last year’s earnings before interest, tax, depreciation and amortisation.
One added that the Pizza Hut restaurants’ operation needed additional funding to mitigate the impact of the Budget and put the business on a sustainable financial footing.
The consequences of a failure to find a buyer or new investment were unclear on Saturday, although the emergence of the process comes amid increasingly bleak warnings from across the hospitality industry.
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Last weekend, Sky News revealed that a letter co-ordinated by the trade body UK Hospitality and signed by scores of industry chiefs – including Mr Hofma – told the chancellor that left unaddressed, her Budget tax hikes would result in job losses and business closures within a year.
It also said that the scope for pubs and restaurants to pass on the tax rises in the form of higher prices was limited because of weaker consumer spending power.
That was followed by a similar letter drafted by the British Retail Consortium this week which also warned of rising unemployment across the industry, underlining the Budget backlash from large swathes of the UK economy.
Even before the Budget, hospitality operators were feeling significant pressure, with TGI Fridays collapsing into administration before being sold to a consortium of Breal Capital and Calveton.
Sky News recently revealed that Pizza Express had hired investment bankers to advise on a debt refinancing.
HWS operates all of Pizza Hut’s dine-in restaurants in Britain, but has no involvement with its large number of delivery outlets, which are run by individual franchisees.
Accounts filed at Companies House for HWS4 for the period from 5 December 2022 to 3 December 2023 show that it completed a restructuring of its debt under which its lenders agreed to suspend repayments of some of its borrowings until November next year.
The terms of the same facilities were also extended to September 2027, while it also signed a new 10-year Pizza Hut franchise agreement with Yum Brands which expires in 2032.
“Whilst market conditions have improved noticeably since 2022, consumers remain challenged by higher-than-average levels of inflation, high mortgage costs and slow growth in the economy,” the accounts said.
It added: “The costs of business remain challenging.”
Pizza Hut opened its first UK restaurant in the early 1970s and expanded rapidly over the following 15 years.
In 2020, the company announced that it was closing dozens of restaurants, with the loss of hundreds of jobs, through a company voluntary arrangement (CVA).
At that time, it operated more than 240 sites across the UK.
Mr Hofma and Interpath both declined to comment.
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