The owners of The Daily Telegraph are to pay themselves a dividend of more than £200m from a refinancing of their retail empire, months after abandoning an auction of the business.
Sky News has learnt that Sir David Barclay and his twin brother Sir Frederick will receive the payout from the launch of a £700m bond issue at Shop Direct – owner of the Littlewoods and Very.co.uk brands.
Bankers from Barclays, HSBC and Mediobanca are among those understood to have been appointed to work on the deal, which is known as a dividend recapitalisation.
The precise size of the windfall that Shop Direct’s owners will land was unclear on Thursday, although several City sources said it was likely to be “in excess of” £200m.
One insider said the bond issue could be launched as early as Friday, although it may slip into next week.
The deal will underline how lucrative an asset Shop Direct, which has benefited from explosive growth in online retailing, has become for the Barclay brothers, who also own London’s Ritz hotel.
Image: Littlewoods is part of the Barclay brothers’ retail empire
The company is chaired by Aidan Barclay, Sir David’s son, and is currently seeking a new chief executive following an announcement earlier this month that Alex Baldock would step down next year.
Mr Baldock’s departure will come months after the Barclay brothers decided to call off an auction of Shop Direct, with private equity firms such as Apax Partners and BC Partners unwilling to meet a mooted £3bn price tag.
Shop Direct has become one of the biggest retailers in the UK by providing customers with access to credit through a financial services arm that helps them to purchase brands including Victoria Beckham, Vivienne Westwood and Hackett.
Roughly two-thirds of its sales are now derived from mobile devices, underlining the departure from Littlewoods’ mail order and high street past following the closure of its catalogue in 2015.
Earlier this month, the company announced a record set of annual results for the fifth successive year, with underlying pre-tax profit up by more than 10% to £160.4m.
Shop Direct’s fortunes, and its ability to refinance on attractive terms that will allow a chunky dividend to be paid to its owners, contrast with those of many of its rivals.
This week, J Sainsbury announced plans to cut 2000 jobs, while other big chains are drawing up plans to axe costs in the new year, according to senior retail executives.
A Shop Direct spokesman declined to comment on its refinancing plans.