The secretary of culture plans to request that the media regulatory agency investigate the proposal by the Barclay family to transfer ownership of the Telegraph and the Spectator magazine to a consortium backed by Abu Dhabi.
On Wednesday, Lucy Frazer expressed her intention to involve Ofcom in reviewing the investment fund’s proposal to acquire the titles in return for settling £1.15bn of the family’s debts to Lloyds Banking Group.
Frazer informed parliament on Wednesday that her department had sent notices to Lloyds, the Barclay family, and the consortium RedBird IMI, stating her intention to issue a Public Interest Intervention Notice (PIIN).
Frazer expressed concerns about potential public interest considerations outlined in Section 58 of the Enterprise Act 2002. These concerns pertain to the proposed loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by RedBird IMI. Frazer believes that these concerns should be investigated further.
These reasons encompass the importance of providing accurate news coverage, allowing for the expression of different opinions, and ensuring a diverse range of perspectives and ownership in the newspaper industry.
Frazer has set a deadline of 3pm on Thursday for all parties involved to submit written statements to her department.
The Secretary of Culture’s statement follows the postponement of the Telegraph’s auction due to the consortium’s announcement. As part of the agreement, RedBird IMI – a partnership between RedBird Capital from the US and International Media Investments (IMI) from Abu Dhabi – will repay the Barclay family’s debts to Lloyds, who took over control of the publications in June.
RedBird IMI has agreed to offer a loan of £600m, with the Telegraph and the Spectator serving as collateral. Additionally, a loan of similar value will be secured against other businesses and commercial ventures owned by the Barclay family.
The CEO of RedBird IMI, Jeff Zucker, formerly of CNN, announced their intention to convert the loan to equity at an early stage and assured that they would not disrupt the Telegraph’s operations.
The spokesperson stated that they are grateful for the chance to present additional arguments to the government. They reaffirmed their commitment to keeping the current editorial team for the Telegraph and Spectator if they acquire ownership. They believe that maintaining editorial independence for these publications is crucial in safeguarding their reputation and credibility.
IMI serves as the investment platform for Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City and the vice-president of the United Arab Emirates. The majority of the funding for Redbird IMI also comes from the United Arab Emirates.
IMI’s portfolio includes the National, a digital and print newspaper based in the Middle East with a UK edition and a London bureau, as well as CNN Business Arabic. It also has stakes in Sky News Arabic and Euronews.
Frazer wrote to RedBird and expressed concern about the investment fund’s connections to media organizations with known biases. She believes that if RedBird IMI gains control over Telegraph Media Group, it could potentially affect the diversity of perspectives represented in UK newspapers.
Several Conservative Members of Parliament (MPs) have sent letters to the Deputy Prime Minister, Oliver Dowden, the Business Secretary, Kemi Badenoch, and Frazer, raising concerns about the use of foreign sovereign wealth to purchase a British national newspaper.
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Frazer stated on Wednesday that a final decision has not been made regarding intervention at this point.
The spokesperson for the Barclay family stated that they will remain cooperative in their discussions with the government regarding this issue.
If requested, Ofcom will conduct a public interest evaluation on the agreement and provide a report within 40 days. If there are no issues, Frazer is responsible for finalizing the deal. However, if Ofcom raises concerns, she must determine whether to accept a commitment from the Telegraph’s new owners to address them.
If the culture secretary chooses to intervene by issuing a PIIN, the Competition and Markets Authority will also examine the transfer of ownership of the Telegraph to determine if there are any potential competition issues.
Frazer stated that based on the information provided, a decision would need to be made regarding whether to involve the CMA in a thorough investigation.
The Barclay family must finish their investigation with Lloyds and RedBird IMI and settle their debts by 1 December. Otherwise, a court hearing in the British Virgin Islands will be postponed and a company connected to the media group will be dissolved.
If the Barclay family fails to pay off their debts by December 4th, it is unlikely that they will contest the liquidation of the parent company. At that point, the sales process will continue.
Source: theguardian.com
