UAE bid for Telegraph looks over as UK govt mulls full probe of deal

19th Mar 2024 14:54

(Sharecast News) - An Abu Dhabi-backed bid for the Telegraph newspaper group looks doomed to fail after the UK government said it was minded to refer the deal to regulators for investigation amid concerns over foreign ownership.

Ministers said industry regulator Ofcom had raised concerns the UAE-linked group involved "may have the incentive to influence Telegraph Media Group in a way that could potentially act against the public interest in the UK".

Known as the "Torygraph", the right-wing daily newspaper is a major supporter of the ruling Conservative Party and lawmakers have expressed worries that foreign ownership will threaten press freedom, even though Rupert Murdoch - a US citizen born in Australia - owns the Times titles along with the tabloid Sun, while Japan's Nikkei took over the Financial Times almost a decade ago.

Their fears are exacerbated in an election year where the administration of Prime Minister Rishi Sunak trails the opposition Labour Party heavily in the polls and faces a potential wipeout with a vote likely in the autumn of this year.

Last year, Abu Dhabi-backed fund RedBird IMI reached a deal with the group's previous owners the Barclay family, to take control of the stable, which also includes the Sunday Telegraph newspaper and Spectator magazine, by paying off debts owed to their bank, Lloyds.

RedBird IMI is majority-owned by Sheikh Mansour bin Zayed Al Nahyan, vice-president of the United Arab Emirates (UAE) and owner of Manchester City Football Club.

Shortly after the deal was first announced, the government triggered a Public Interest Intervention Notice (PIIN) to investigate its potential impact on press freedom.

Ofcom and the Competition and Market Authority (CMA) were told to investigate the proposed deal and deliver findings for a deadline last week.

While Ofcom expressed its concerns, the CMA found in the initial review that the deal was not expected to result in a "substantial lessening of competition".

However, the deal faces a second risk after a minister said last week that foreign governments will be banned from owning UK newspapers and magazines under an amendment to current legislation to be introduced by the summer.

The parties have until March 25 to make representations before she refers the deal to the Competition and Markets Authority

Reporting by Frank Prenesti for Sharecast.com