The takeover of the Telegraph has been referred for further regulatory scrutiny as the communications watchdog said the purchase, by an Abu Dhabi-backed investment fund, may “operate against the public interest”.
Competition and communications regulators, the Competitions and Markets Authority (CMA) and Ofcom, have been directed by Culture Secretary Lucy Frazer to enter the next stage of their investigation into the purchase of the Daily and Sunday Telegraph newspapers and the Spectator magazine.
Money blog: Washing powder ‘shrinkflation’ exposed by shopper
According to Ms Frazer, Ofcom’s initial findings are that the acquisition of the media brands by a 75% Abu Dhabi-backed investment fund, called RedBird-IMI, may “operate against the public interest, having regard to the specified public interest considerations”.
The buyers are 75% financed by the United Arab Emirates vice president Sheikh Mansour while former CNN president Jeff Zucker is also behind the deal.
The potential owner “may have the incentive to influence [the Telegraph] in a way that could potentially act against the public interest in the UK by influencing the accurate presentation of news and free expression of opinion”, Ms Frazer said.
Please use Chrome browser for a more accessible video player
Whether the regulators approve the acquisition or not is likely irrelevant as new legislation looks set to block it.
But Ms Frazer said more regulatory probing is required due to “the need for accurate presentation of news and free expression of newspapers”.
Digital Markets Act
Plans to ban foreign governments from owning British newspapers and magazines – effectively blocking the takeover – were announced last week.
The commitment was set out in the House of Lords in an amendment to the Digital Markets Act, which is currently making its way through parliament.
For its part the CMA, according to Ms Frazer, said it does not believe the merger has resulted, or may result, in a reduction in competition.
The full CMA and Ofcom reports will be published “in due course”, she added.
Be the first to get Breaking News
Install the Sky News app for free
A final decision, however, has not been reached, Ms Frazer said, and RedBird IMI have until 25 March to respond.
