The government has said it intends to launch a second investigation into the Barclay family’s complex deal to transfer control of the Telegraph, after its UAE-backed consortium partner revealed a last-minute corporate structure change that has raised public interest concerns.
The culture secretary, Lucy Frazer, said she was “minded to” issue a new public interest intervention notice (PIIN) to call in the regulators Ofcom and the Competition and Markets Authority (CMA) to look at RedBird IMI’s move to create a new UK holding company to house The Telegraph and sister magazine The Spectator when it takes control of the titles.
RedBird IMI, which derives most of its funding from Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the UAE and owner of Manchester City football club, is paying the £1.16bn in debts that the Barclay family owed to Lloyds bank and has said it will swiftly convert the loan to take ownership if the deal goes through.
The consortium, which is run by the former CNN chief Jeff Zucker, said that the corporate structure manoeuvre had not changed the “identity, nature or economic interests of the ultimate shareholders”.
However, in a written statement Frazer criticised the company for revealing the change at this “very late stage” – Ofcom and the CMA are due to deliver by Friday the reports on the findings prompted by her first PIIN, which she issued in November.
“I have noted the very late stage in the process at which information about this new corporate structure has been shared and implemented,” she said. “I do not consider this is conducive to the full and proper functioning of the process.
“I expect the parties to ensure that all the relevant authorities have timely access to all relevant information, and in sufficient detail, in order that they, and subsequently I as secretary of state, can make our determinations.”
Letters have been sent to solicitors representing the Barclay family and RedBird IMI, giving them until 9am on Thursday to make any representations regarding Frazer’s intention to launch a new investigation.
RedBird IMI has maintained it would remain a “passive investor” and would not “exert any control” over the Telegraph or Spectator once it assumes ownership.
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However, in the letters the DCMS said it noted that the structure meant that “there are certain reserved matters where IMI consent will still be required under the partnership agreement”.
