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 Abu Dhabi-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 its sister magazine, The Spectator, when it takes control of the titles.
If, as expected, Frazer decides to launch a second PIIN, it will effectively supersede the first investigation ordered at the end of November – the findings of which are due to be delivered to the Department for Culture, Media and Sport (DCMS) by Friday – and Ofcom and the the competition regulator would then return a new set of reports by mid-March.
RedBird IMI, which derives most of its funding from Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the United Arab Emirates 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”, just days before the deadline for the regulators to publish the findings of their first investigation.
“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 that it would remain a “passive investor” and would not “exert any control” over the Telegraph or Spectator once it assumes ownership.
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”.
A spokesman for RedBird IMI said: “This change was made in order to clarify the point that IMI is a passive investor in the company that will own the Telegraph and as such will have no management or editorial involvement whatsoever in the title.”
