LONDON, Nov 22 — The UK government said today it was “minded” to review the proposed sale of the Telegraph Media Group to an Abu Dhabi-backed investment fund on public interest grounds.
The fund, RedBird IMI, announced Monday that it was set to take control of The Daily and Sunday Telegraph sister newspapers and The Spectator magazine.
The joint venture between US firm RedBird Capital and Abu Dhabi’s International Media Investments said it has agreed loans of around £1.2 billion (RM7 billion) to take control of the parent company of the right-leaning titles.
However, Culture Secretary Lucy Frazer indicated her ministry wrote Wednesday to various parties involved in the proposed deal “to inform them that I am ‘minded to’ issue a public interest intervention notice”.
This was motivated by “concerns I have that there may be public interest considerations... (that) warrant further investigation,” she said in a written statement to lawmakers.
The Telegraph group has been controlled by twin brothers Frederick and David Barclay for nearly two decades but has been put up for sale over unpaid debts.
Lender Bank of Scotland announced in June that it had appointed a receiver for its Bermuda-based holding company, due to “debts being in default and with no sign they would be repaid”.
In its announcement, RedBird IMI said a £600 million “package of loans” will fully repay the debts owed, allowing the media group to be taken out of receivership.
The joint venture added it also intends to exercise an option to convert a further “similar” sized loan — secured against the Telegraph and Spectator titles — into equity.
Redbird Capital, run by former CNN president Jeff Zucker, would then run the publications “alone”, with IMI being “a passive investor only”, according to the fund.
But the plans have sparked concern among some lawmakers in the ruling Conservative party, which has long enjoyed a close ideological relationship with the Telegraph titles.
A small group of Tory MPs has urged the government to investigate the planned takeover, querying the wisdom of allowing sovereign wealth funds of illiberal countries to buy national newspapers, the Financial Times reported.
In her statement, Frazer said the deal could be probed on public interest grounds specified in the 2002 Enterprise Act, including the need for “accurate presentation of news” and “free expression of opinion” in newspapers.
“It is important to note that I have not taken a final decision on intervention at this stage,” she added, noting those involved had been invited to make “further representations” by 1500 GMT on Thursday. — AFP
