The UK government is planning to interrupt the takeover plans of one of the UK’s leading newspapers.
The Telegraph Media Group which owns the British newspaper The Daily Telegraph is up for sale to an Abu Dhabi-backed investment fund and the UK government is likely to intervene as it is worried about the newspaper’s operations.
The UAE-backed fund, RedBird IMI, could influence the operations of The Daily Telegraph newspaper, making it not an effective source of impartial reporting.
Earlier on Monday, RedBird IMI announced that it is taking over The Daily Telegraph, The Sunday Telegraph and The Spectator magazine.
Reacting to that, the UK Culture and Media Secretary Lucy Frazer wrote a letter to RedBird IMI on Wednesday, expressing the Sunak government’s concern over the operations of the British newspaper.
Frazer revealed that her ministry sent letters to several parties involved in the Telegraph Media Group takeover, informing them about a possible public interest intervention notice by the UK government.
In a statement issued to UK lawmakers, the Media Secretary said: “It was motivated by concerns that there may be public interest considerations… [that] warrant further investigation.”
Meanwhile, RedBird IMI assured that they were fully committed to maintaining the existing editorial team of The Spectator magazine and The Telegraph.
The company is a joint venture of US firm RedBird Capital and Abu Dhabi’s International Media Investments. Together they are investing £1.2 billion to take control of the Telegraph Media Group.
Earlier the media house which was run by brothers Frederick Barclay and David Barclay for nearly 20 years ran into debt, leading to this sale.
The Bank of Scotland which was giving loans to the Telegraph Media Group appointed a receiver for its Bermuda-based holding company in June. This was due to the debts being in default with no sign of repayment.
However, RedBird IMI said that they would pay off the package of £600 million loans, ultimately getting out of receivership. They also revealed that they will convert a similar-sized loan secured by The Telegraph and The Spectator titles into equities.
Jeff Zucker, the former president of CNN who is now running RedBird Capital announced that the organisation is planning to run the publications all alone with IMI being just a passive investor in the fund.
However, this has raised concerns amongst UK lawmakers from the Conservative party which has a close ideological relationship with the Telegraph Media Group newspapers.
Some Tory MPs have sought the intervention of the Sunak government, asking how sovereign wealth funds from overseas can be allowed to purchase national newspapers.
As per Frazer’s statements the RedBird IMI deal could be proved under the Enterprise Act 2002 on public interest grounds that deals with accurate presentation of news and free expression of opinions in UK newspapers.
The Media Secretary confirmed that a final decision to intervene in the takeover hasn’t been taken and is subject to discussion with the representatives of the companies involved in the process.
Takeover to make Telegraph a global brand
On Thursday, the UK Foreign Office tried to soften Frazer’s language as it could offend the UAE ahead of the foreign investors’ summit in London next week and Prime Minister Rishi Sunak’s trip to the Gulf countries in the following week for Cop28.
Frazer said that the UK government is aware that the investment fund had “links to media organisations that have been critiqued for partisan views and therefore believes there may be an impact on the plurality of views of newspapers in the UK if RedBird IMI gain influence over Telegraph Media Group”.
However, the PMO has clarified that the decision of intervening solely lies on the shoulders of the media secretary and the Foreign Office was just following the standard practice of advising government departments.
RedBird IMI has further assured that they would set up an advisory board to ensure that the British newspapers are running as it is, independently.
Speaking about the matter, Jeff Zucker said: “We feel confident that with those moves there should be no question about the editorial independence of The Telegraph or Spectator. I’ve spent 35 years running or supervising news organisations, and there’s nothing I understand more than editorial independence. I have staked my reputation and legacy on not allowing editorial interference.”
Zucker explained the reason behind this takeover as The Telegraph has “real potential” to become a global media.
“We’ve thought for a long time that the real gap in the US marketplace was a very strong centre-right media brand,” Zucker said.
Jeff Zucker has alleged that rival bidders are behind the present tensions regarding the matter.
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