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Media tycoons Rupert Murdoch and Jonathan Harmsworth, owners of News Corp. and the Daily Mail, respectively, have reportedly discussed a potential collaboration with the Abu Dhabi-backed fund Redbird IMI to acquire the Telegraph Media Group (TMG).
According to sources familiar with the matter, a consortium comprising News Corp, Daily Mail General Trust (DMGT), and Redbird IMI is being considered to address concerns among British policymakers about foreign ownership of TMG.
Insiders suggest that under this arrangement, Redbird IMI, a media investment fund supported by a member of the UAE royal family, may hold a reduced stake in TMG, possibly as low as 25 per cent. However, Redbird IMI is still actively pursuing complete ownership of TMG, which includes The Daily Telegraph, The Sunday Telegraph, and The Spectator.
There are indications that hedge fund manager Paul Marshall, co-founder of Marshall Wace, might not be involved in the joint proposition. Marshall declined to provide comment to Bloomberg.
The potential involvement of Murdoch and Harmsworth could raise concerns about competition within the UK media landscape. DMGT, News UK, and RedBird IMI declined to comment on the matter.
TMG was put up for sale last year after the Barclay family defaulted on £1.6 billion worth of debt owed to lender Lloyds Bank. This led to an auction to sell the right-leaning papers, attracting interest from various potential buyers, including DMGT, Murdoch, and Marshall.
However, Redbird IMI fully settled the Barclay debts, facilitating its potential acquisition of TMG. This move sparked criticism from MPs, prompting ongoing investigations into the possible impact of a foreign takeover on public interest.
Britain’s competition watchdog and Ofcom have submitted their probes into the £600 million deal to media secretary Lucy Frazer, who can veto the agreement if necessary.
Frazer confirmed receipt of the reports on Tuesday, stating that she will decide, in a quasi-judicial capacity, whether to refer the merger for further investigation by the CMA. She aims to publish the CMA and Ofcom reports and make further statements on any decision as quickly as possible.
Meanwhile, Prime Minister Rishi Sunak is expected to decide in the coming days whether the government will propose an amendment to legislation in parliament to tighten regulations to prevent foreign states from acquiring commercial interests in the British media industry.
