Abu Dhabi (AFP): Abu Dhabi-backed investment fund RedBird IMI said Monday it is set to take control of The Daily and Sunday Telegraph sister newspapers and The Spectator magazine in Britain.
RedBird IMI — a joint venture between US firm RedBird Capital and Abu Dhabi’s International Media Investments — said it had struck a deal for a “package of loans” totalling £600 million ($750 million) to take control of the Telegraph Media Group.
The parent company of the right-leaning titles has been controlled by the Barclay family for nearly two decades but was put up for sale earlier this year over unpaid debts.
RedBird IMI said it will fully pay off the debts owed to Lloyds Banking Group, allowing the media group to be taken out of receivership.
The joint venture added it also intends to exercise an option to convert a further “similar” sized loan — secured against the Telegraph and Spectator titles — into equity.
With regulatory approval, that would give it eventual ownership of the Telegraph Media Group.
Redbird Capital, run by former CNN president and noted media executive Jeff Zucker, would run the publications “alone” with IMI being “a passive investor only”, according to the joint venture.
– Government appeal –
The assurances follow a group of lawmakers from the ruling Conservative party urging the government to use the UK’s national security laws to investigate Abu Dhabi’s role in the takeover, the Financial Times reported Sunday.
The five Tory MPs have written to deputy prime minister Oliver Dowden, business secretary Kemi Badenoch and culture secretary Lucy Frazer querying the wisdom of allowing overseas sovereign wealth funds to buy national newspapers, it said.
Announcing the financial deals Monday, a spokesman for RedBird IMI said in a statement that it will “provide a loan to the value of £600 million, secured against the Telegraph and Spectator”.
“Any transfer of ownership will of course be subject to regulatory review and we will continue to co-operate fully with the government and the regulator,” he said.
“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 spokesman added the joint venture was “entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications” to protect their “reputation and credibility”.
Telegraph Media Group was bought by twin brothers Frederick and David Barclay in 2004 for £665 million.
But lender Bank of Scotland announced in June that it had appointed a receiver for the Bermuda-based holding company of the group, due to “debts being in default and with no sign they would be repaid”.
It said then that the appointment of financial advisory firm AlixPartners was a “last resort” and followed discussions to “find a consensual solution and repayment” of the borrowing that reportedly amounted to £1 billion ($1.2 billion).
