Published: 04 December 2023
By Suzanne Evans, Director, Political Insight
Culture Secretary Lucy Frazer intervened formally on Thursday to prevent an Abu Dhabi backed fund taking control of The Telegraph Group. Frazer issued a Public Interest Intervention Notice (PIIN) to RedBird IMI, thereby triggering an initial investigation by both Ofcom and the Competition and Markets Authority (CMA) into the proposed takeover. The PIIN has been issued amid concerns about censorship and the national security implications should the Daily and Sunday Telegraph and Spectator titles pass into foreign ownership, although the proposal is a joint one with their former owners the Barclay family. The Barclay’s are set to repay a £1.2bn debt to Lloyds Banking Group to regain control of the titles, having had them wrested away from them by Lloyds when mature borrowing was not repaid. To do this, the family has arranged a £600m loan from RedBird IMI which will be converted to ownership of the titles, and it is this debt-for-equity part of the deal that is to be investigated. Ofcom will examine the impact of the deal on news accuracy and editorial freedom, while the CMA will explore legal technicalities and competition issues. The regulators have been asked to deliver their reports by 26th January, with possible outcomes including either an outright ban on the takeover, or strict legal controls on how RedBird, which is led by former CNN chief Jeff Zucker, is allowed to operate. Meanwhile, the PIIN prohibits the removal or transfer of key Daily Telegraph journalists during the probe.
The rail strikes are back on. No trains ran at Avanti West Coast, Chiltern, Great Northern Thameslink or West Midlands Railways yesterday, the BBC says, and tomorrow there will be no service on C2C and Greater Anglia trains, with other rolling strikes planned until 8th December plus an overtime ban lasting until 9 December. The disruption is in this case because of demands being made by train drivers’ union Aslef. The RMT union, which represents other rail workers, is not currently staging strikes after its members voted to accept a pay offer.
Lord Houchen, the Mayor of Tees Valley, is reportedly set to strike a deal with US nuclear power company Westinghouse to build small modular nuclear reactors (SMRs) in the northeast of England. Three sites are involved: the former Redcar steel works, the ICI Wilton chemical works site and another next to the existing Hartlepool nuclear power station. Houchen has said the four reactors are expected to cost less than £10bn and generate 1.2 gigawatts of power – enough for 1.6m homes, and be “completely privately funded”, without taxpayer subsidies.
The Times has found that when London’s ULEZ (Ultra Low Emission Zone) was expanded, it cost Londoners £5.3m in just the first week. The number of charges paid went from 425,814 (August 29-September 4) compared to 141,029 the week before. The newspaper obtained the figures via a Freedom of Information Request.
The value of gold has hit a new record high this morning, topping $2,111 an ounce, before falling back to $2,086.
Sir Rocco Forte has sold 49% of his luxury hotel chain to Saudi Arabia’s public investment fund (PIF), a transaction made possible as Italian entity CDPE Investimenti (CDPEI) has sold its entire stake. The new partnership is already rolling out plans to double the size of the chain in the Middle East. The Forte family retains majority ownership and control, and Forte and his sister Olga Polizzi will continue to lead the business.
Mike Ashley's Frasers Group has backed out of plans to buy SportsCheck after the German sports retailer filed for insolvency, saying now it will work with the administrators on a new deal. It said in October it was buying the firm from Signa Retail Department Store Holding for an undisclosed sum.
Signa’s insolvency could also affect London’s Selfridges, as it owns the luxury department store 50/50 with Thailand’s Central Group. Selfrides has more than £1.7bn of debt, with the loan secured against the freehold of the sprawling Oxford Street property. However, a spokesman for Selfridges said: “This does not change anything for Selfridges, we continue to operate and service our loans and lease obligations as normal. Selfridges trades independently from our shareholders.” A spokesman for Central Group said: “Central Group remains steadfast in its commitment to safeguard and support its European luxury stores regardless of its partner’s financial circumstances.” It said it was in robust financial health and benefitted from “access to a wide range of funding streams to support the development of this unique portfolio”.
Meanwhile, the Daily Telegraph says some of Europe’s largest banks are facing steep losses because of the collapse of Signa after lending billions of euros to the Austrian billionaire Rene Benko’s property empire. Analysts at JP Morgan calculate that the two main companies in Benko’s sprawling Signa group have borrowed a combined €7.7bn (£6.6bn) from banks on the continent, with several of his backers lending him hundreds of millions each. It is estimated that €1.8bn of Signa’s debts alone are due to be repaid this year, “though hopes of that happening are fading rapidly,” the newspaper says. The total financial liabilities of Signa Prime and Signa Development, the two largest entities in the group, stand at €13bn, it says. In addition to €7.7bn of loans, the company owes €1.6bn to bondholders and has €1.8bn of so-called hybrid capital, usually made up of equity and debt, outstanding. A further €2bn is owed to various creditors. Among those most exposed is the Austrian bank Raiffeisen, which is thought to have lent Signa more than €750m, and the Swiss lender Julius Baer, which is reportedly on the hook for €640m. Italy’s Unicredit, Credit Suisse, and Germany’s Commerzbank are also believed to be facing heavy losses.
William Hill owner 888 Holdings has rejected a £700m takeover approach by Playtech, according to The Sunday Times. 888's shares were trading at 70.6p today, valuing the business at around £300m, although they are up around 16% since then on the news. 888 paid nearly £2bn for William Hill in 2022.
Lloyds is shutting another 45 of its branches next year: 22 Halifax branches, 19 Lloyds branches and four Bank of Scotland branches.
Metro Bank plans to axe around 20% of its staff and is reviewing its policy of keeping branches open seven days a week. Last week, the bank received shareholder approval for a £925m refinancing, and is looking to save around £50m a year. The challenger bank has, however, restated its commitment to physical branches, but will transition "to a more cost-efficient business model, investing in automation for service and back-office operations and improving digital channels, particularly for deposits". It added it “continues to seek sites in the North of England for new stores”.
Richard Donnell, executive director of Zoopla, says record migration has pushed up rents across the UK and contributed to the affordability crisis in the sector, all at a time when many landlords are quitting the marketplace. Figures published by the Office for National Statistics last week showed net migration reached a record 745,000 in 2022. In the two years to June, nearly 1.3m people immigrated to the UK. Donnell said renting was the “first port of call” for those moving to the country, and estimated that as many as nine in ten of people coming to the UK were “in the rental market initially.” “We have a triple whammy on the demand side, one element of which is migration,” he said, adding: “A lot of international students have come into the UK which is fine, but there is not enough purpose-built student accommodation. And so you get an overspill of that student demand into the private rented sector.” Donnell also noted that one in ten houses advertised on Zoopla are sold by a landlord. “The total number of private rented homes in this country is stuck at 5.5m and it has been for the last seven years,” he said. During that time, almost 2.51m people have migrated to the UK.
The CBI, the business lobbying group that was brought to the brink of collapse after a sexual misconduct scandal earlier this year, is asking members to approve a 5% hike in their subscription fees at next week's annual meeting, Sky News says.
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