THE prospect of a quick sale of the £600 million Telegraph Group ahead of a general election next year appeared to fade today as rival bidders geared up for what seems certain be an awkward political fight.
Lloyds Bank put the group that also owns The Spectator up for sale last month in frustration at debts of £1.2 billion owed by the warring Barclay family.
Yesterday a bid from RedBird IMI seemed from reports to be the front runner, with finance from Sheikh Mansour bin Zayed al-Nahyan, the vice president of the United Arab Emirates. RedBird insists the Sheikh will be a passive investor with no editorial involvement. If RedBird wins, the Telegraph will be run by former CNN boss Jeff Zucker.
While there is little question it has the money, the involvement of Gulf finance in the Israel-backing Telegraph has always seemed problematic.
Sir Paul Marshall, a hedge fund king who owns GB News, has been told by lawyers there is “clear grounds” for a public interest intervention from culture secretary Lucy Frazer into the RedBird deal.
Sir Paul wants to tie up with US billionaire Ken Griffin to grab the Telegraph assets and expand the brand in the US.
Today Frazer issued the following statement:
"My Department has today written respectively to Lloyds Banking Group (via Bank of Scotland plc), the Barclay family and RedBird IMI, the current and proposed new owners of Telegraph Media Group, to inform them that I am ‘minded to’ issue a Public Interest Intervention Notice."
Recipients of the letter have until tomorrow by 3pm to respond.First bids to Goldman Sachs, handling the sale, are due at the end of the month but that deadline already looks likely to slip. The sales process has been paused to complete due diligence on the RedBird deal and the source of the funds.
Lord Rothermere, the proprietor of the Daily Mail Group, is also expected to bid and has said no Middle Eastern money will be involved in his deal.
For the City, some of the bid amounts of money being talked about don’t make sense.
Johnathan Barrett, media analyst at Panmure Gordon, said: “It is a valuable business with a decent profit margin and in principle it is an attractive property given the subscriptions and audience. The question is price. Will buyers stick to a rational return-based price or will someone overpay on a vanity or influence basis?”
Senior Tories have already asked deputy prime minister Oliver Dowden, business secretary Kemi Badenock and Culture Secretary Lucy Frazer to take a close look at any new owners.
A letter from MPs said: “Material influence over a quality national newspaper being passed to a foreign ruler at any time should raise concerns, but given the current geopolitical context, such a deal must be investigated.”
Any investigation is a hindrance to Lloyds, which wants a clean sale agreed before a general election that some speculate could come as soon as May. Lloyds had no comment but is known to be tired of dealings with the Barclay family.
