The UK government is leaning toward ordering a probe into RedBird IMI’s proposed Telegraph deal, after the prospect of an Abu Dhabi-backed fund taking control of the British newspaper raised national security concerns among some Conservative lawmakers.
Culture Secretary Lucy Frazer said she’s “minded to” issue a so-called Public Interest Intervention Notice. “This relates to concerns I have that there may be public interest considerations,” that are “relevant to the intended loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by RedBird IMI,” she said in a statement Wednesday. “These concerns warrant further investigation.”
Frazer said she has not yet taken a final decision on intervention at this stage.
If she decides to issue the notice, it will trigger action from media regulator Ofcom and antitrust watchdog Competition and Markets Authority, who will report their findings to Frazer. Parties have until Thursday afternoon to make representations to her, she said.
RedBird IMI said in a statement that it welcomes “the opportunity to make further representations to the Government, restating that if we gain ownership of the Telegraph and Spectator we will be fully committed to maintaining the existing editorial team of the publications.”
The Barclay family lost control of the Telegraph and the Spectator magazine to LLoyds Banking Group Plc in June after failing to pay debt. RedBird IMI has agreed a loan package with the Barclay family that would let it take control of the Telegraph newspaper and Spectator magazine. The family has agreed a loan package with RedBird IMI to pay back the loans.
RedBird IMI — a media investment vehicle and a joint venture between RedBird Capital Partners and Sheikh Mansour Bin Zayed Al Nahyan-backed International Media Investments — said Monday that it is supporting the Barclay family with a £600 million ($752 million) loan package that includes an option to convert the debt to equity. IMI will also lend a further £600 million secured against other Barclay family businesses and commercial interests.
Some Conservative lawmakers, including Business Secretary Kemi Badenoch and Security Minister Tom Tugendhat, have raised concerns about the potential foreign ownership of the politically influential titles. Separately, several backbench MPs invoked national security and called for Frazer to issue a PIIN in a letter seen by Bloomberg News.
--With assistance from Thomas Seal.
(Adds statement from RedBird IMI in fifth paragraph.)
