Abu Dhabi-backed fund pulls out of deal to take over UK’s Telegraph newspaper group
LONDON (AP) — Britain’s Telegraph newspaper group is back up for sale Tuesday after a United Arab Emirates-backed consortium pulled out of a takeover bid following strong opposition from the U.K. government.
Abu Dhabi-backed investment fund RedBird IMI said it was withdrawing from the proposed acquisition of the Telegraph Media Group, which owns the right-leaning Daily Telegraph and Sunday Telegraph newspapers and The Spectator magazine.
The takeover faced a backlash from Britain’s government, which voiced concerns about the impact on freedom of expression and accurate presentation of news. Last month the government said it was bringing forward legislation to block foreign state ownership of British newspapers and magazines.
Officials also launched a probe into the proposed deal’s potential impact on freedom of speech. Ofcom, the media watchdog, raised concerns that the proposed takeover could influence “the accurate presentation of news and free expression of opinion” in the publications.
The Telegraph papers are closely allied to the governing Conservative Party.
The investment group said Tuesday its plan was “no longer feasible.”
“We continue to believe this approach would have benefited the Telegraph and Spectator’s readers, their journalists and the U.K. media landscape more widely,” the fund said in a statement. “Our focus now is on providing certainty to the employees and readers of The Telegraph and The Spectator, and securing best value for the assets, which remain highly attractive.”
RedBird IMI is backed by U.S. financial firm RedBird Capital Partners and Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family and the UAE’s vice president. It is run by former CNN chief Jeff Zucker.
The fund reached an agreement last year with the Barclay family, the media group’s previous owners, to provide loans to them and ensure that the family’s debts, worth some 1 billion pounds ($1.25 billion), are paid.
The deal included an option to turn the loans into equity, which would give it ownership control of the newspaper and magazine.
Britain’s Culture Secretary Lucy Frazer said she will monitor the orderly transition of the media group, “with a view to taking any further regulatory action as required.”
“The free press is a cornerstone of our democracy and we cannot take it for granted,” she said. “We are acting to ensure that we retain the ability to step in where necessary to protect the integrity and independence of these publications, given the unique role they play in our democracy.”