Investigation launched into takeover of Telegraph and Spectator by UAE-based fund

Business

The culture secretary has launched an investigation into the takeover of The Daily Telegraph by a state-backed Abu Dhabi-based fund.

An inquiry by communications watchdog Ofcom and competition regulator the Competition and Markets Authority (CMA) has been triggered by Lucy Frazer, confirming reporting by Sky News.

Ms Frazer on Thursday issued a public interest intervention notice (PIIN) into RedBird IMI’s prospective ownership of the newspaper.

The CMA has been tasked with examining the “jurisdictional and competition matters” while Ofcom will look at the media public interest consideration, “namely, the need for accurate presentation of news and free expression of opinion in newspapers”, she added.

Both regulators must report back by 26 January next year.

Ms Frazer also said she reserved the right to take “such further action” under the Enterprise Act, a reference to the ability to force independent governance of the newspapers during the PIIN process.

The RedBird IMI investment vehicle includes funding from Sheikh Mansour bin Zayed al Nahyan, a member of Abu Dhabi’s royal family and owner of Manchester City.

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It’s led by the former CNN president Jeff Zucker.

The paper came up for sale after it was placed into receivership when its former owners, the Barclay family, did not meet loan payments.

Lloyds had called for repayments to be made that the family could not afford.

The lender had been locked in talks with the Barclays for years about refinancing loans made to them during the 2008 banking crisis.

The PIIN could approve the takeover of the Telegraph title as well as The Spectator magazine or ignite an auction of two of the country’s most influential publications.

Prospective bidders for the titles, such as the hedge fund billionaire and GB News shareholder Sir Paul Marshall, had been pushing for the launch of a PIIN.

Sky News last week reported that Ed Richards, the former boss of media regulator Ofcom, is acting as a lobbyist for RedBird IMI.

Interest has also come from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher.

The Telegraph auction has now been paused until next month.

The original deadline for bids was moved from 28 November to 10 December in case Lloyds was repaid in full by the Barclay family by 1 December.

On Wednesday, Lloyds wrote to the Department for Culture, Media and Sport (DCMS) notifying officials that the Barclay family will repay a £1.16bn loan to it in the coming days, thanks to the RedBird IMI purchase.

“We welcome the opportunity to provide the government with the information needed to scrutinise our deal, and we will continue to cooperate fully with the government and regulator throughout this process,” a RedBird IMI statement said.

“RedBird IMI remains entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications and believes that editorial independence for these titles is essential to protecting their reputation and credibility.”

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