The sales process for Telegraph Media Group and The Spectator has been paused following a circa £1.2bn bid from Abu Dhabi-backed fund RedBird IMI.
Current Telegraph owners the Barclay family plans to use the funding to repay its debt to Lloyds Banking Group by December 1.
If they fail to repay the debt by the deadline, they will reportedly not contest the liquidation of a holding company on December 4, removing them them from having any role in The Telegraph or The Spectator’s futures.
The auction process, which began in October, has now been paused. It could resume should the Barclays fail to repay the debt by the deadline or should RedBird IMI walk away from the proposed deal.
DMGT, National World and GB News joint owner Sir Paul Marshall all potential alternative investors should that situation arise.
Abu Dhabi-backed investment fund RedBird IMI announced on Monday it believed it would take control of the Telegraph and Spectator after agreeing loans to repay the Barclays’ debts. It would then convert a substantial portion of the loans into equity.
The matter may not be cut and dry just yet, however. This morning (Wednesday November 22) Culture Secretary Lucy Frazer announced she is “minded to” issue a Public Interest Intervention Notice, saying there were potential public interest issues around the funding from RedBird IMI.
Frazer’s statement said: “My Department has today written respectively to Lloyds Banking Group (via Bank of Scotland plc), the Barclay family and RedBird IMI, the current and proposed new owners of Telegraph Media Group, to inform them that I am ‘minded to’ issue a Public Interest Intervention Notice. This relates to concerns I have that there may be public interest considerations – as set out in section 58 of the Enterprise Act 2002 – that are relevant to the intended loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by RedBird IMI and that these concerns warrant further investigation.”
Several Tory MPs have expressed concern over the prospect of a fund closely linked to a foreign government taking control of a major player in the UK media, and have written a letter to this effect to Frazer and Deputy Prime Minister Oliver Dowden.
A key figure in, and backer of, RedBird IMI is Manchester City owner, UAE Royal and Deputy PM Sheikh Mansour bin Zayed Al Nahyan. The New York Times reported in June that 75 per cent of RedBird IMI’s $1bn founding capital in December 2022 came from Abu Dhabi, while UAE government minister Sultan Ahmed Al Jaber is its chair.
Frazer was keen to emphasise that she has not yet come to a definitive conclusion on the need for intervention: “It is important to note that I have not taken a final decision on intervention at this stage,” she said. “The ‘minded to’ letter invites further representations in writing from the parties and gives them until 3pm on 23 November to respond.”
The Telegraph has itself expressed concern over the takeover. A column published last night suggested its takeover “by a fund linked to a state not known for encouraging free expression is bound to concern readers.”
RedBird IMI’s statement on Monday insisted it believes that “editorial independence for these titles is essential to protecting their reputation and credibility.”
The Telegraph’s column acknowledged these “encouraging intentions” but said the bidder must “spell out how it will ensure that a cast-iron and binding commitment to the Telegraph’s continued independence can be guaranteed.”
RedBird IMI is led by former CNN president Jeff Zucker, while Sky News revealed on Monday that former Ofcom chief Ed Richards is acting as a lobbyist for the firm.