London’s Telegraph, Spectator near takeover by Abu Dhabi-backed Jeff Zucker fund Redbird IMI
RedBird IMI has struck a loan deal with the Barclay family that would see it take control of the Telegraph newspaper and Spectator magazine, a prospect that has sparked concern among conservative lawmakers because of the fund’s ties to Abu Dhabi.
The media investment vehicle, which is a joint venture between RedBird Capital Partners and the UAE-based company. Investments in international mediasaid in a statement on Monday that it had agreed to lend the Barclay family £600 million ($750 million), secured by the politically influential securities.
“Under the terms of this agreement, RedBird IMI has an option to convert the loan secured by Telegraph and Spectator into shares, and intends to exercise this option as soon as possible,” the investment vehicle said in a statement.
Lloyds Banking Group Plc seized the Telegraph’s titles as well as the Barclay family’s Spectator magazine in June to recoup its debts, removing members of the Barclay family from their directorships and placing the companies in receivership. The RedBird IMI loan will help the Barclay family repay the debt owed to Lloyds.
Separately, IMI will lend a further £600m secured by other Barclay family businesses and business interests. IMI is a private investment vehicle for Sheikh Mansour Bin Zayed Al Nahyan, according to a spokesperson for RedBird IMI, whose statement emphasized that IMI’s involvement would be passive.
“Following the transfer of ownership, RedBird Capital will assume sole management and operational responsibility for the securities under the leadership of RedBird IMI Managing Director Jeff Zucker,” the statement said, referring to the former CNN chairman. “International Media Investments will only be a passive investor.”
Nonetheless, RedBird IMI’s statement will likely increase concern among conservative lawmakers, who are pushing the British government to take a closer look at the UAE’s involvement. Lawmakers described any possible influence by the UAE royal family over the Telegraph as “a risk to our national security”, citing its record on press freedom and its stance on Israel.
The prospect of foreign influence over the stock has already raised concerns among senior ministers, including Kemi Badenoch and Tom Tugendhat, Bloomberg News reported on Saturday.
“Any transfer of ownership will of course be subject to regulatory review,” RedBird IMI said in its statement, which is committed to maintaining the publications’ existing editorial team. “We will continue to cooperate fully with the government and the regulator.”
Even before that, UK Culture Secretary Luzy Frazer could issue a so-called public interest intervention notice. That would launch a review of the deal by British regulators. She could also freeze the transaction during this time, if she wishes. Antitrust watchdog – the CMA – and media regulator Ofcom will report their findings on antitrust and media issues respectively, to inform Frazer’s final decision, which could see her approve the deal, block it or impose conditions .
