The Barclay family has sought to keep the source of funds for their potential deal to take back the Telegraph titles anonymous amid controversy over potential investment from the Gulf in UK media assets.
The family are fighting to regain control of their prized media assets, first acquired by Sir Frederick Barclay and his twin, the late Sir David Barclay, in 2004. Lloyds seized The Daily Telegraph, The Sunday Telegraph and The Spectator following a dispute over debt.
The Barclays have raised funding from the UAE to win back the publications by satisfying debt owed to Lloyds. The bank is still seeking court approval to dissolve a company controlled by the Barclays as it prepares the assets for sale. Goldman Sachs is running an auction process that could fetch about £600 million.
A court in the British Virgin Islands was given details of the Barclay family’s effort to regain control at a hearing yesterday. Sources said the Barclays have now raised 83 per cent of the £1.144 billion owed to Lloyds.
The court was told funding would be provided in cash by a “well-respected member of the UAE royal family”. However, lawyers representing the Barclay family would not provide the individual’s name. They have instead offered to provide it on a confidential basis to Lloyds’ lawyers or the court.
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Middle Eastern investment in national newspapers is likely to attract scrutiny. It has been reported that Lloyds will only consider offers where less than 25 per cent of the funding is from the Middle East.
Ofcom is set to determine whether funding sources pose a risk to freedom of speech as part of the regulatory process. Substantial Gulf investment could be blocked under the provisions of the National Security and Investment Act.
The Barclays’ lawyers said the transaction would not lead to regulatory issues and could complete in 15 days. Bidders for the Telegraph include Lord Rothermere’s Daily Mail and General Trust, the GB News investor Sir Paul Marshall, the former Telegraph editor Sir William Lewis, and the German publisher Axel Springer. News UK has reportedly registered its interest.
