RedBird IMI has agreed a loan package with the Barclay family that would let it take control of the Telegraph newspaper and Spectator magazine, a prospect that’s 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 United Arab Emirates-based International Media Investments, said in a statement Monday that it had agreed to lend the Barclay family £600 million ($750 million), secured against the politically influential titles.
“Under the terms of this agreement, RedBird IMI has an option to convert the loan secured against the Telegraph and Spectator into equity, and intends to exercise this option at an early opportunity,” the investment vehicle said in a statement.
Lloyds Banking Group Plc seized the Telegraph titles along with the Spectator magazine from the Barclay family in June to claw back debts, removing Barclay family members from their director positions and placing the businesses in receivership. The RedBird IMI loan will help the Barclay family to pay off the debt owed to Lloyds.
Separately, IMI will lend a further £600 million secured against other Barclay family businesses and commercial interests. IMI is a private investment vehicle for Sheikh Mansour Bin Zayed Al Nahyan, according to a spokesman for RedBird IMI, whose statement emphasized IMI’s involvement would be passive.
“Following transfer of ownership, RedBird Capital alone will take over management and operational responsibility for the titles under the leadership of RedBird IMI Chief Executive Jeff Zucker,” the statement said, referring to the former president of CNN. “International Media Investments will be a passive investor only.”
Still, RedBird IMI’s statement will likely heighten concern among Conservative lawmakers, who are pushing the UK government to scrutinize the UAE’s involvement. Lawmakers have described any possible influence of the UAE royal family over the Telegraph as “a risk to our national security,” citing its record on press freedom and position on Israel.
The prospect of foreign influence on the title has already raised concerns among senior ministers including Kemi Badenoch and Tom Tugendhat, Bloomberg News reported Saturday.
“Any transfer of ownership will of course be subject to regulatory review,” RedBird IMI said in its statement, which pledged to maintain the existing editorial team of the publications. “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 study of the deal by British regulators. She could also freeze the transaction while that happens, if she chooses. The antitrust watchdog – the CMA – and media regulator Ofcom will report findings on antitrust and media issues respectively, to inform Frazer’s final decision, which could see her clear the deal, block it, or impose conditions.
Thomas Seal, Bloomberg
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