Uae-backed Telegraph bid risks public interest, Ofcom tells Frazer

A UAE-BACKED takeover of The Telegraph would potentially be against the public interest, the media regulator Ofcom has warned the Culture Secretary.

Lucy Frazer told MPS that she was “minded to” refer the deal for an in-depth investigation by the Competition and Markets Authority (CMA) over its potential threat to press freedom.

She said in a written ministerial statement that the parties, including the Uae-backed bidder Redbird IMI, would have 10 working days to respond to her proposal. The process is running in parallel to plans for new laws to ban foreign state ownership of British newspapers, which would supersede the CMA’S investigation.

Ms Frazer’s latest intervention nevertheless represents a further sign of official opposition to Redbird IMI’S bid, which media analysts already believed was effectively dead.

The fund, 75pc bankrolled by the UAE vice-president Sheikh Mansour bin Zayed al-nahyan, had hoped to assuage regulatory concerns with assurances that he would be a merely passive owner.

However, in her statement, Ms Frazer said: “Ofcom has found that it is or may be the case that the potential merger situation may be expected to operate against the public interest, having regard to the specified public interest considerations.

“In particular, they consider that International Media Investments (IMI), a majority partner in RB Investco’s parent company, may have the incentive to influence TMG 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 in The Daily Telegraph and The Sunday Telegraph.”

The media analysts Enders have said that Redbird IMI may choose to formally notify Ms Frazer it will not pursue the takeover further, after the Government last week announced new laws to ban foreign state ownership.

In a note to clients, Enders said: “The intention of the law is clearly to persuade Redbird IMI to formally notify Lucy Frazer of the end of its pursuit of the merger with The Telegraph, thus ending the regulatory clearance process on grounds of competition and public interest.”

Redbird IMI has indicated it will await the text of the legislation before making a decision on how to proceed. An onward sale of and

The Spectator magazine has been speculated as the most likely next step. Earlier, Ms Frazer denied operating a double standard by accepting ownership of Manchester City Football Club by Sheikh Mansour but opposing his Telegraph takeover.

The Culture Secretary said that it was important to “draw a distinction” between investment in a sporting entity, or in business spheres, and links to the acquisition of a national newspaper.

Appearing on ITV’S Good Morning Britain, Ms Frazer was asked whether it was right for the Government to give a “tick” to the Emirati ownership of Manchester

City, but attempt to block the proposed Telegraph sale.

“I don’t think there is [a double standard],” she said. “We believe in this country in the free press. The media’s job is to hold power to account and it’s therefore inappropriate for the UK Government to own a newspaper, and it’s therefore also inappropriate for a foreign state to own a newspaper.

“But we are very much open for business in terms of foreign investment in other spheres, like football. They’re totally different.”

Redbird IMI had positioned itself to take control by repaying the debts of the Barclay family, the current owners.