Posted on February 2, 2010 - by Venik

Egyptian billionaire poised to join Lebedev in Independent deal

London Evening Standard owner understood to be talking to Samih Sawiris about takeover of Independent titles

Russian tycoon Alexander Lebedev is understood to be attempting to bring a wealthy Egyptian partner into his proposed takeover of the Independent newspapers, MediaGuardian can reveal.

Sources close to the deal said the owner of the London Evening Standard was trying to persuade the Sawiris family to join him in his latest UK media venture.

Lebedev, a former KGB spy, has told associates that he expects Egyptian billionaire Samih Sawiris to invest in the Independent and Independent on Sunday. The men are already partners in a chateau development in Switzerland, it is understood.

“In addition to the Lucerne project, he will be involved in the Independent,” said one source close to Lebedev today.

The details of the proposed agreement with one of three billionaire sons from Egypt’s wealthiest family are unknown. The Sawiris are Coptic Christians with a track record of opposing Muslim extremism.

The source said today that Lebedev and Samih Sawiris had become close and were talking about other business projects in Russia and elsewhere, including a low-cost housing development.

There was no immediate response from Lebedev today to inquiries from MediaGuardian. The Russian billionaire, who in exclusive non-binding talks with Independent News & Media over the sale of the Independent and Independent on Sunday, has given few details of his offer for both titles.

Negotiations are due to conclude by Monday, 15 February. INM’s pension deficit and printing deals are understood to be the stumbling blocks. Lebedev indicated last week there was as yet no deal with INM for the Independent titles.

Lebedev’s surprise attempt to bring in a new partner will suggest to some that he lacks the available resources to buy and rescue the Independent and Independent on Sunday on his own.

The negotiations with Samih Sawiris – the chairman and chief executive of Orascom Development Holding SA and one of three sons of Onsi Sawiris, who founded the Orascom group of companies in the 1950s – come despite Lebedev being quoted last week as saying he would “absolutely” fund his proposed Independent News & Media buyout from his own pocket.

While Lebedev is currently involved in deals sanctioned by the Russian prime minister, Vladimir Putin, to sell his stake in Aeroflot and the Ilyushin Finance Corporation, which are expected to net him about £450m, he has ruled out using any of the cash for his newspaper deals.

Lebedev said he would invest the money in other Russian projects, though sources in Moscow familiar with the agreements suggest he has been barred by the state from taking the money to the west.

The sale of his Aeroflot shares to a state bank chaired by Putin has raised further questions about Lebedev’s relationship with the Russian government. The tycoon describes himself as a “loyal oppositionist”.

His Russian newspaper, Novaya Gazeta, is bitterly critical of Putin. But some have wondered whether his attempt to build a British media empire is part of a Kremlin-approved project to project a more favourable image of Russia in the west.

“Ideally, he would like to liquidate everything in Russia and move to London,” said a well-placed source. “Yes, he is getting rid of his shares in Ilyushin and Aeroflot and other assets but he has been told not to expect to be able to move the proceeds out of Russia. He has to reinvest in Russia.”

The Sawiris family, whose fortune was valued at more than $20bn before the recession, are mainly involved in property, tourism and telecommunications. They have a reputation for operating successfully in tough foreign markets and in recent years have branched out from the Middle East to expand in the west and to break into North Korea.

Tourism developments include the Taba Heights resort in Sinai and Tala Bay Aqaba Resort in Jordan. Additionally, the family has won rare permission in Switzerland to develop a new alpine village at Andermatt, a major long-term project fronted by Samih.

The family has newspaper and television interests in Egypt with Naguib Sawiris, who heads the family’s telecoms interests, owning a stake in Egypt’s popular daily al-Masry al-Youm.

He has been especially vocal in criticising the rise in Islamic fundamentalism in Egypt. “I am not against the head scarf because then I would be against personal freedoms,” he said in 2007. “But when I walk in the street now I feel like I am in Iran … I feel like a stranger.”

He also condemned the Brotherhood, which insists that non-Muslims and women are ineligible to run for the country’s presidency. “To hell with them,” he said. “Not a single Christian is waiting for their permission. God is just. God does not discriminate between people.”

Speaking to the Guardian last week, Lebedev dismissed any link between the sale of his Aeroflot shares and a possible purchase of the Independent and the Independent on Sunday. He joked, however: “With that kind of money I could probably buy all of the newspapers [in Britain].”

Instead, Lebedev said he had reached a “gentleman’s agreement with the Russian state to invest the money on various social projects”. These included new low-cost housing, a British-style building society for ordinary savers, and factories for his agricultural businesses that grow high-quality, low-cost potatoes.

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