Telegraph court showdown to be adjourned after Barclays offer Lloyds £1.16bn

Published

10 months ago

November 18, 2023

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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.

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.

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Telegraph bidders given new deadline as £100m Spectator sale looms

Published

14 hours ago

September 8, 2024

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Telegraph bidders given new deadline as £100m Spectator sale looms

The remaining bidders for The Daily Telegraph have been given a deadline for revised bids for the right-leaning newspaper as its stablemate, The Spectator magazine, clinches a £100m sale to the hedge fund tycoon Sir Paul Marshall.

Sky News understands that RedBird IMI, the Abu Dhabi-backed entity which was thwarted in its efforts to buy the media titles by a change in ownership law, has asked at least three parties to table second-round offers on 27 September.

It comes after bidders began holding talks with Telegraph bosses last week about the company’s business plan.

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The remaining parties are understood to include Sir Paul and National World, the London-listed media group run by newspaper veteran David Montgomery.

At least one other party whose identity has yet to be disclosed publicly is also in contention to buy the newspapers.

A separate bid orchestrated by Nadhim Zahawi, the former chancellor, is the subject of bilateral discussions with IMI, the Abu Dhabi-based venture which wanted to take a controlling stake in the British media assets before being blocked by the government.

Sky News revealed exclusively last month that Sir Paul was the frontrunner to buy The Spectator, which along with the Telegraph titles was owned by the Barclay family until their respective holding companies were forced into liquidation last year.

His deal for The Spectator, which will be implemented through Old Queen Street Ventures, will be announced this week, and potentially as early as Monday.

It will also include the art magazine Apollo.

RedBird IMI, a joint venture between IMI and the American investor RedBird, paid £600m last year to acquire a call option that was intended to convert into equity ownership.

A sale of The Spectator for £100m would leave it needing to sell the Telegraph titles for £500m to recoup that outlay in full – or more than that once RedBird IMI’s fees and costs associated with the process are taken into account.

One source said the price RedBird IMI had secured for The Spectator had exceeded expectations and left it well-placed to break even on its investment.

“The original decision to pre-empt an auction has been vindicated by the level of interest since it started,” the source said.

Of the unsuccessful bidders for the Telegraph, Lord Saatchi, the former advertising mogul, offered £350m, while Mediahuis, the Belgian publisher, also failed to make it through to the next round of the auction.

Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding earlier in the summer amid concerns that he would be blocked on competition grounds.

Sky News recently revealed that Mr Zahawi had sounded out Boris Johnson, the former prime minister, about an executive role with The Daily Telegraph if he succeeded in buying the newspapers.

IMI is controlled by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan.

The Lloyds debt, which totalled more than £1.15bn, was repaid by RedBird IMI on behalf of the family.

RedBird IMI’s attempt to take ownership of the Telegraph titles and The Spectator was thwarted by the last Conservative government’s decision to change media law to prevent foreign states exerting influence over national newspapers.

Spokespeople for RedBird IMI and Sir Paul declined to comment.

Business

Bank of London finalises capital-raising after HMRC winding-up petition

Published

1 day ago

September 7, 2024

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Bank of London finalises capital-raising after HMRC winding-up petition

A clearing bank launched just three years ago is raising tens of millions of pounds of fresh funding just days after it was served with a winding-up petition by the UK tax authorities.

Sky News understands that The Bank of London, which attempted to rescue Silicon Valley Bank UK last year, is progressing plans for the capital-raising, which one person close to the company said could secure “up to £50m”.

The precise figure was unclear this weekend.

The new funding is understood to be being lined up from a number of investors including an entity called Aphorism Holding, according to the person.

Nada Hadadi, a wealthy investor who was suggested as being the primary source of the capital, has in fact only contributed a six-figure sum.

News of the company’s capital-raising plan comes days after it announced that Anthony Watson, its founder and chief executive, was stepping down to become a senior adviser and non-executive director of its holding company.

HM Revenue & Customs had issued a winding-up petition against The Bank of London’s holding company over unpaid taxes.

The liability has now been settled, according to an insider.

It described the issue as a “simple administrative handling delay caused by an internal miscommunication, which has been addressed”.

“We spoke with HMRC on Friday morning, and they are currently updating the filing.

“While this update may take a couple of days to reflect online, it is in process.”

The Bank of London claims to have amassed 4,500 clients since its launch but was outgunned last year by HSBC in a weekend race to rescue SVB UK.

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Body Shop’s remaining stores saved after rescue deal struck

Published

2 days ago

September 7, 2024

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Body Shop's remaining stores saved after rescue deal struck

More than 100 Body Shop stores have been saved from closure after a deal was struck to rescue one of Britain’s best known high street chains.

The well-known retailer was bought out of administration by a consortium led by “Cosmetics King” Mike Jatania.

The millionaire tycoon’s investment firm Aurea announced the completion of the acquisition on Saturday.

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Mr Jatania and Charles Denton, former chief executive of beauty brand Molton Brown, will head the new leadership team.

In a statement, Aurea said the deal would “steer the Body Shop’s revival and reclaim its global leadership in the ethical beauty sector it pioneered”.

It is understood there are no immediate plans to shut any of its 116 remaining UK stores.

Sky News revealed earlier this week that Aurea was poised to finalise the buyout as it lined up more than £30m in new financing.

Mr Jatania previously ran Lornamead – the owner of personal care brands including Lypsyl, Woods of Windsor, Yardley, and Harmony haircare – which he sold to rival Li & Fung for around £155m more than 10 years ago.

The Body Shop fell into administration in early February after previous forecasts for how much funding it would need to keep going proved too low.

In the weeks that followed, administrators warned hundreds of jobs would be lost and dozens of shops closed.

The business had employed about 1,500 store workers before its collapse into insolvency.

The company’s administration underlined the decline of the high street stalwart.

It was founded in 1976 by Dame Anita Roddick, trading out of a small shop in Brighton, which made its name selling cruelty-free fair trade products.

Mr Jatania, co-founder of Aurea, said: “With the Body Shop, we have acquired a truly iconic brand with highly engaged consumers in over 70 markets around the world.

“We plan to focus relentlessly on exceeding their expectations by investing in product innovation and seamless experiences across all of the channels where customers shop while paying homage to the brand’s ethical and activist positioning.”

Charles Denton, chief executive of the Body Shop, said: “We believe there’s a sustainable future ahead and working closely with the management team we aim to restore the Body Shop’s unique, values-driven, independent spirit.”