February 24, 2024
Culture secretary blocks Abu Dhabi fund from seizing Telegraph during investigation

Lucy Fraser’s most recent order bans any changes being made to Telegraph management or the removal of key editorial staff – Yui Mok/PA Wire

The Culture Secretary has blocked an Abu Dhabi-backed fund from taking control of The Telegraph while she reviews a proposed takeover deal.

Lucy Fraser today issued a “set aside” order that prevents ownership of the newspaper from being transferred to Redbird IMI.

The move, formally known as an interim enforcement order, prevents the group from merging The Telegraph with another entity and prevents any changes in management or removal of key editorial staff.

The order is designed to prevent actions by bidders that could hinder the government’s ability to review transactions.

Under the terms of the proposed deal, Redbird IMI would provide a £1.2 billion loan that would allow the Barclay family to repay loans to Lloyds Banking Group, freeing The Telegraph and The Spectator magazines from receivership.

Approximately half of this debt will be converted into ownership of the two titles. However, the Hold Separate Order ensures that this second phase of the transaction cannot proceed until the review is complete.

It comes after Ms Fraser yesterday intervened in the takeover amid concerns about censorship and foreign state ownership.

The Culture Secretary issued a Public Interest Intervention Notice (PIIN), triggering investigations by the Competition and Markets Authority (CMA) and media regulator Ofcom.

Manchester City owner and UAE vice-president Sheikh Mansour has provided three-quarters of Redbird IMI’s funding – Martin Ricketts

Redbird IMI is a joint venture between Redbird, an American private equity firm, and International Media Investments (IMI), an Abu Dhabi vehicle backed by Manchester City owner Sheikh Mansour bin Zayed Al-Nahyan.

IMI is providing 75 per cent of the £600m price for The Telegraph and The Spectator, while the bid is being led by former CNN chief Jeff Zucker.

The proposed deal has raised concerns given the UAE’s authoritarian leadership and track record of press censorship.

Senior figures including Lord Hague have called for the deal to be halted, while Tory MPs this week wrote to Deputy Prime Minister Oliver Dowden urging him to intervene on national security grounds.

Redbird IMI has said it is prepared to make legally binding undertakings to ensure editorial independence, in which the UAE will remain a fully passive investor.

But in a letter to the group yesterday, officials said Ms Fraser felt further investigation was needed “given the limited information she has seen and the lack of detail about the proposals”.

Ofcom will investigate the deal’s impact on the need for accurate presentation of news and free expression of opinion in newspapers, while the CMA will look at potential competition issues.

Both watchdogs have launched a call for evidence, allowing interested parties to comment over the coming fortnight. They will have to report back to the Culture Secretary by 26 January.

Rival contenders, whose bids were derailed by the complex debt-financed deal, are expected to lobby against the UAE-backed takeover in their responses.

These include a consortium led by hedge fund founder Sir Paul Marshall and DMGT, publisher of The Daily Mail.

In a statement on Thursday, a spokesperson for Redbird IMI said: “We welcome the opportunity to provide the government with the information necessary to investigate our deal, and we look forward to cooperating fully with the government and the regulator throughout this process.” will continue.

“Redbird IMI is fully committed to retaining 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.”

Source: uk.finance.yahoo.com

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