LONDON — RedBird IMI has withdrawn its offer to buy the UK newspaper conglomerate Telegraph Media Group, which includes the eponymous broadsheet newspaper. The Abu-Dhabi backed company said that government intervention on the proposed acquisition meant the deal was “no longer feasible.”
RedBird IMI is a consortium led by former CNN executive Jeff Zucker and financed by Abu Dhabi’s International Media Investments, an investment vehicle backed by United Arab Emirates Vice President Sheikh Mansour bin Zayed Al Nahyan. Sheikh Mansour is a prominent member of Abu Dhabi’s ruling family and is the owner of Britain's Manchester City soccer club.
RedBird IMI effectively took control of TMG in December, when it repaid the owner Barclay family’s debts, including a $753 million loan secured against the media outlets. The Barclay family had owed 1.2 million pounds ($1.5 million) to Lloyds Banking Group. TMG owns the conservative publications The Daily Telegraph, The Sunday Telegraph and the Spectator magazine.
"RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale," a RedBird IMI spokesperson said in a statement Tuesday.
“Regrettably, it is clear this approach is no longer feasible. 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," the firm said, adding that it held constructive conversations with the UK government about ensuring a smooth sale.
TMG has always been seen as close to the ruling Conservative party and many right-wing parliament members, including former Prime Minister Boris Johnson, have written for The Telegraph. Johnson also previously edited The Spectator magazine.
As a result, many British lawmakers on both sides of the political aisle had raised concerns about the potential RedBird IMI takeover, mainly around press freedom and the amount of government access and leverage it could give Abu Dhabi.
Lucy Frazer, the UK secretary of state for digital, culture, media and sport, announced in November that she was “minded to” issue a public intervention notice regarding RedBird IMI’s planned $600 million takeover of TMG.
The UK’s Competition and Markets Authority investigated jurisdictional and competition issues involving the purchase, while Ofcom, Britain’s media regulator, probed the public interest considerations of the proposed deal. Ofcom concluded in March that the UAE has "clear political and broader commercial incentives to influence the editorial line" of The Telegraph with the proposed RedBird IMI takeover.
The UK Parliament is finalizing legislation that will effectively prohibit any level of foreign state ownership of UK print news assets. RedBird IMI falls under the law’s definition of foreign power.
Al-Monitor has contacted TMG for more comment.
Commenting on the deal, Tom Chivers, policy lead at the Media Reform Coalition, told Al-Monitor, “As soon as MPs and Peers mobilized to block any foreign takeover of British newspapers, the writing was on the wall for RedBird/IMI’s ownership of the Telegraph and Spectator."
He added, “Even had parliament not taken this unprecedented step, the regulatory reviews by Ofcom and the CMA would have almost certainly given the UK government ample reason to halt the deal.”
