SEC unlikely to step in over Barclays bid to buy Black's stake

The US Securities & Exchange Commission has removed one of the regulatory hurdles facing the Barclay brothers after indicating that it is unlikely to intervene.

The SEC is currently investigating the New York-listed Hollinger International for violations of corporate law and has vowed to bring those responsible at the company to justice. It has lodged court orders protecting the interests of the company's non-controlling shareholders and barring any interference in an internal investigation into the alleged unauthorised payments to company directors.

However, the SEC has now indicated that it will not intervene unless the Barclays enforce changes to the company board or interfere with the committee that is investigating Hollinger International.

In the UK, the deal will inevitably be scrutinised by both the Competition Commission and by Ofcom following new laws enshrined in the Communications Act. These demand that deals involving national papers must be subject to a public interest test or plurality test.

Given that the Barclays' existing newspaper interests are limited and their reputation for upholding their editorial independence, it is considered the Barclays will be unlikely to fail any plurality test.