Lloyds pledges independent governance amid Telegraph deal probe

Lloyds Banking Group has pledged to retain the independent board appointed to oversee the sale of The Daily Telegraph amid a government probe into its potential purchase by an Abu Dhabi-backed investment fund.

Sky News has learned that the high street lender wrote to officials on Thursday to say it would support the retention of a trio of independent directors while a public interest inquiry is carried out.

The bank’s intervention, which has the backing of both the Barclay family and RedBird IMI, the investment vehicle that would eventually take control of the broadsheet newspaper and The Spectator magazine, comes as Lucy Frazer, the culture secretary, prepares to issue a public interest intervention notice (PIIN ) in relation to the transaction.

The government confirmed an exclusive Sky News report earlier this week that it was set to issue a PIIN amid concerns – including warnings from rival bidders – about possible editorial interference with the Telegraph’s journalism.

Friday was Jeff Zucker, the former CNN president, as Sky News revealed last week stand at the head of the agreementtold the Financial Times that competing bidders were “slinging mud”.

“There’s a reason why people sling mud and throw arrows – [it’s] because they want to own these assets,” he told the newspaper.

“And they have their own media assets to try to hurt us.”

The battle for control of The Daily Telegraph has quickly turned into a complex commercial and political row which has raised tensions between the Department for Culture, Media and Sport and the Foreign Office.

RedBird IMI has offered to repay a £1.16bn debt owed to Lloyds by the Barclay family with £600m. of that secured against the media assets.

The Abu Dhabi royal family-backed vehicle would then convert the Telegraph loan into equity, while the balance would remain as debt secured against other Barclay family assets, including Very Group, the online retailer.

An investigation stemming from PIIN, which would be carried out by Ofcom and potentially the Competition and Markets Authority, could last several months.

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The Barclay family had initially tried to argue that a PIN would be unnecessary because its deal with third-party investors involved a straightforward repayment of debt rather than a change of ownership.

If the Culture Secretary triggers an inquiry, it will follow mounting pressure from Conservative MPs and peers to investigate a RedBird IMI takeover of two of Britain’s most influential newspapers.

Potential bidders led by billionaire hedge fund and GB News shareholder Sir Paul Marshall have also been agitating for such a move.

RedBird IMI includes funding from Sheikh Mansour bin Zayed Al Nahyan, a member of the Abu Dhabi royal family and owner of Manchester City.

Sky News had previously revealed that Ed Richards, the former head of media regulator Ofcom, acts as a lobbyist for RedBird IMI through Flint Global, which was co-founded by Sir Simnon Fraser, former Foreign Office permanent secretary.

The Telegraph auction, which has attracted interest from Daily Mail owner Lord Rothermere and National World, a London-listed local newspaper publisher, has now been put on hold until next month.

The original offer deadline had been moved from 28 November to 10 December to allow for the possibility that Lloyds could be repaid in full by the Barclay family ahead of a cut-off date of 1 December.

A rescheduled court hearing to wind up one of the family’s Telegraph-affiliated holding companies is now scheduled to take place on December 4.

Sky News previously reported that Barclays had now agreed not to contest the liquidation if they do not repay the loans by December 1.

Barclays has made a number of increased bids in recent months to reject an auction of the newspapers it bought almost 20 years ago, raising its bid last month to £1bn.

Lloyds had repeatedly told the family and its advisers that they would either have to repay the debt in full or join the auction with other bidders.

Until June, the papers were headed by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who, with his late twin Sir David, engineered the takeover of the Telegraph in 2004.

Lloyds had been locked in talks with Barclays for years over refinancing loans given to them by HBOS prior to the bank’s rescue during the 2008 banking crisis.

The Telegraph and Spectator disposals are being overseen by a new group of directors led by Mike McTighe, the boardroom veteran who chairs Openreach and IG Group, the financial trading firm.

McTighe has been appointed chairman of Press Acquisitions and May Corporation, the respective parent companies of TMG and The Spectator (1828), which publishes the media titles.

In July, Telegraph Media Group (TMG) published full-year results that showed pre-tax profits had risen by a third to around £39m in 2022.

Lloyds and RedBird IMI declined to comment on Friday.

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