UK govt intervenes in potential Telegraph takeover by Abu Dhabi-backed fund

Britain's government said on Thursday it has asked media and market competition officials to look into a potential Abu Dhabi-backed takeover of The Telegraph newspaper.

Culture Secretary Lucy Frazer said she issued a public interest intervention notice after considering the possible impact of the offer by the investment fund RedBird IMI to the previous owners of The Telegraph and The Spectator magazine to repay debts owed by them.

RedBird IMI a joint venture between RedBird Capital and Abu Dhabi's International Media Investments, and led by former CNN chief Jeff Zucker said earlier this month it agreed to provide loans to Britain's Barclay family and ensure the family's debts, worth some 1 billion pounds ($1.25 billion), are paid.

The Barclay family owned the right-leaning newspaper and magazine before they were put into receivership. The family also previously owned London's luxurious Ritz Hotel before selling it in 2020.

RedBird IMI has said it would provide a loan of up to 600 million pounds (USD 751 million), secured against the publications, with International Media Investments also providing a similar loan against other Barclay-linked assets.

The fund said the deal includes an option to turn the loans into equity which would give it ownership control of the newspaper and magazine.

Frazer said Thursday she has asked the Competition and Markets Authority and Ofcom, the UK's communications regulator, to look into the deal and report back to her by the end of January.

Lenders for the Barclay family would need to agree to the deal, which is expected to attract a high level of political scrutiny.

RedBird IMI said it will cooperate fully with the government and regulator.

We welcome the opportunity to provide the government with the information needed to scrutinize our deal," it said in a statement.

RedBird IMI remains entirely committed to maintaining 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," it added.