Unclear path: Copies of the Telegraph are displayed on a rack in a supermarket in London. The fate of one of the United Kingdom’s most famous newspapers’ ownership has been up in the air for months. — Reuters
LONDON: Rupert Murdoch’s News Corp and the owner of the Daily Mail have held talks about a potential joint takeover of the Telegraph – one of the United Kingdom’s most famous newspapers – alongside the United Arab Emirates-backed investment fund RedBird IMI, people familiar with the matter say.
A joint bid by the three would result in a smaller stake for RedBird IMI, which may ease concerns of UK politicians over foreign state control of a legacy media outlet, said the people, who asked not to be identified discussing private talks.
Representatives from the Daily Mail and General Trust (DMGT), owner of the Daily Mail newspaper controlled by Jonathan Harmsworth, and News Corp’s News UK unit have held back-channel conversations on how to form such a joint structure, they said.
The fate of the Telegraph’s ownership has been up in the air for months.
RedBird IMI, a joint venture between a New York investment firm and a UAE-backed media investment vehicle, had agreed last year to provide loans of about £600mil to gain control of the Telegraph from the Barclay family.
The paper was seized from the family after they fell behind on debt payments.
But some UK lawmakers have raised concerns about foreign control of the outlet. UK probes have stalled the deal and meanwhile rival bidders have continued to circle.
DMGT and News UK declined to comment, as did RedBird IMI, other than to say it isn’t involved in the discussions.
RedBird IMI, fronted by former CNN chief Jeff Zucker, has been approached by a number of parties interested in teaming up, but it’s still focused on buying the paper outright, one of the people familiar with the talks said.
A fourth rival bidder, hedge fund manager Paul Marshall, the co-founder of Marshall Wace, may be excluded from the joint proposal, the people said. Marshall declined to comment.
The conversations began when RedBird IMI’s takeover of the Telegraph and Spectator publications came under fire by lawmakers in the UK’s governing Conservative Party, people familiar with the situation said.
Sheikh Mansour, the deputy prime minister of the UAE, owns the majority of Redbird IMI, sparking concerns from ministers in Prime Minister Rishi Sunak’s cabinet about foreign state ownership, Bloomberg previously reported.
Sunak is due to decide in the coming days whether the government will propose an amendment to legislation in parliament that would make it harder for foreign states to take commercial interests in the UK media industry.
On Monday, the UK Competition and Markets Authority and UK communications regulator Ofcom were due to submit the results of their own probes into the deal to Culture Secretary Lucy Frazer.
While a joint bid could ease concerns about the UAE’s involvement, it may raise new issues for media plurality and competition if Harmsworth and Murdoch took on more interest in UK news titles.
Under one scenario that has been discussed, RedBird IMI would take a stake as low as 25% in the Telegraph in an attempt to satisfy concerns about foreign state interference, the people familiar with the talks said, while cautioning that discussions are preliminary and it isn’t clear whether parties would reach a deal on a joint structure.
DMGT and News UK have previously proposed a joint venture to combine their printing operations.
Meanwhile, opposition Labour leader Keir Starmer is concerned about foreign state ownership of UK news outlets but is not at this stage actively opposing the RedBird IMI bid, a person familiar with his thinking said, contradicting a statement that Shadow Culture Secretary Thangam Debbonaire made this weekend about the Labour Party’s plans to oppose the takeover. — Bloomberg
