Lloyds Banking Group has pledged to retain the independent board brought in to oversee the sale of The Daily Telegraph during a government probe into its potential purchase by an Abu Dhabi-backed investment fund.
Sky News has learnt that the high street lender wrote to government 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 which would ultimately 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 deal.
The government confirmed an exclusive Sky News report earlier this week that it was minded to issue a PIIN amid concerns – including warnings from rival bidders – about possible editorial interference in the Telegraph’s journalism.
On Friday, Jeff Zucker, the former CNN president who Sky News revealed last week was spearheading the deal, told the Financial Times that competing bidders were “slinging mud”.
“There’s a reason that people are slinging mud and throwing darts – [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 rapidly 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 by the Barclay family to Lloyds, 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.
A probe arising from the PIIN, which would be carried out by Ofcom and potentially the Competition and Markets Authority, could last for months.
The Barclay family had initially sought to argue that a PIIN 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 does trigger an inquiry, it would follow mounting pressure from Conservative MPs and peers to investigate a RedBird IMI takeover of two of Britain’s most influential newspapers.
Prospective bidders led by the hedge fund billionaire 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 Abu Dhabi’s royal family and owner of Manchester City.
Sky News had previously revealed that Ed Richards, the former boss of media regulator Ofcom, is acting 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 drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, has now been paused until next month.
The original bid deadline had been shifted from November 28 to December 10 to take account of the possibility that Lloyds could be repaid in full by the Barclay family ahead of a December 1 cut-off point.
A rearranged court hearing to liquidate one of the family’s Telegraph-linked holding companies is now scheduled to take place on December 4.
Sky News reported earlier that the Barclays had now agreed not to contest the liquidation if they do not repay the loans by December 1.
The Barclays have made a series of increased offers in recent months to head off an auction of the newspapers they bought nearly 20 years ago, raising its proposal last month to £1bn.
Lloyds had repeatedly told the family and its advisers that they should either repay the debt in full or participate in the auction alongside other bidders.
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 in 2004.
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 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.
Lloyds and RedBird IMI declined to comment on Friday.
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