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Lloyds has washed its hands of The Telegraph. What happens now?

Published Dec 05, 2023 13:52 Updated Dec 05, 2023 14:10
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Proactive Investors - Ownership of the right-wing broadsheet The Telegraph is in a strange limbo situation.

Lloyds Banking Group PLC (LON:LLOY) took Telegraph Media Group – publisher of The Telegraph and The Spectator – into receivership in June after long-term owners the Barclay brothers failed to honour over £1 billion in debt repayments.

After springing a plan using United Arab Emirates-backed money to cover the debt, the Barclays (LON:BARC) have successfully regained control of the Tory party’s top read.

Specifically, the Barclays tapped Abu Dhabi-backed RedBird IMI (LON:IMI) to wrest control back from Lloyds to stave off an open auction to the highest bidder.

Abu Dhabi-backed RedBird IMI expects to gain control of The Telegraph through this deal, but nothing is set in stone.

The controlling Tory government is nervous about Middle Eastern money exerting influence over The Telegraph, while communications regulator Ofcom has opened an inquiry into the matter.

In an invitation to comment, Ofcom asked the public to consider potential conflicts of interest emerging from the acquisition.

Depending on the outcome of the inquiry and pressure from Tory MPs, RedBird IMI may not end up taking ownership of the paper after all, despite stumping up the cash for it.

To be more specific, RedBird IMI may be blocked from converting its £600 million line of credit to the Barclays into an equity stake in Telegraph Media Group.

Presumably, this will leave the Barclays with a £600 million debt obligation to RedBird IMI, but with full control of their paper.

Depending on the terms, this could leave the Barclays no better or no worse off, financially speaking, though it is evidently the preferred option for The Telegraph’s editorial team.

“In a free society no government – including the country’s elected one – should own a news media outlet,” wrote Telegraph columnist Janet Daley.

She continued: “The power wielded by a state must be, always and without qualification, separate from the presentation and analysis of information in the public domain. That principle has been one of the distinguishing differences between tyrannies and democracies in the modern world.”

Associate editor Camilla Tominey was even more direct, stating that “a misogynist foreign state must not be allowed to own The Telegraph”.

“This paper has a proud history of promoting women’s voices, including mine. It has to continue in that vein,” Tominey declared.

Their trepidation was shared with a group of lawmakers, who last week warned: "With the UAE's increasingly influential position as a mediator and power broker, the risk for interference in Britain's national conversation seems self-evident if the acquisition is allowed to go ahead.”

Regardless of what happens, RedBird will not be getting any equity in TMG until the regulators finish their probe on January 26, when the fate of The Telegraph, and the Barcays’ debt obligations, are sealed.

RedBird has been approached for a comment.

Read more on Proactive Investors UK

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Lloyds has washed its hands of The Telegraph. What happens now?
 

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John Williams
John Williams Dec 05, 2023 17:22
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Who hasn’t washed their hands of the Telegraph?!
 
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