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The Guardian
26-06-2025
- Business
- The Guardian
Ministers refuse to name companies that lobbied them over foreign ownership of UK newspapers
Ministers are refusing to name the media companies that lobbied them over laws restricting foreign state ownership of British newspapers, the Guardian can reveal. The government announced last month it was tripling the proportion of a British newspaper that could be owned by an overseas power to 15%. The change paves the way for the Telegraph to be bought by a consortium including an investment vehicle backed by the United Arab Emirates. However, ministers have taken the unusual step of ordering secrecy over the names of four media companies who responded to a consultation on the issue. A crossbench group of peers scrutinising the proposed law change said they had been told not to reveal the companies involved. The group, which includes Labour peers, said: 'We were asked by the department not to reveal the identity of the organisations which responded. We are concerned about the department's decision to treat information about the respondents to a public consultation confidentially. 'This is an unusual approach, especially as the published consultation document made clear that a summary of the key points raised would be published on the department's website, including 'a list of the organisations that responded'.' The Guardian understands that Rupert Murdoch's News UK was one of the companies to respond. Lord Rothermere's Daily Mail and General Trust (DMGT) group, which owns the Daily Mail, Mail on Sunday and the i Paper, has also reportedly given its view to ministers. It is not known what position either company took. News UK and DMGT declined to comment. The Guardian has already revealed that a UAE delegation met Downing Street officials weeks before the law change was announced. DMGT has links to the Gulf, where it has focused its events business. Lord Rothermere was also spotted among the high-profile media figures in Doha last month meeting the US president, Donald Trump, and the Qatari emir, Tamim bin Hamad Al Thani. The law change, which is to be subjected to a House of Commons vote, is seen as part of Keir Starmer's drive to woo overseas investors as part of his search for UK economic growth. But there are concerns in parliament over easing of the state ownership law. Max Wilkinson, the Lib Dem spokesperson for culture, media and sport, said: 'It's unbelievable that ministers will not reveal who advised them. Many people will assume the worst: that vested interests have bent the will of the government on this vital issue. 'Our country has a proud history of free and independent journalism. It's a principle that lies at the heart of our democratic tradition. The willingness of our government to water that down is deeply concerning. The ministers involved must come clean. Meanwhile, me and my Lib Dem colleagues in parliament will work fearlessly to stand up for our free press and block this legislation from passing.' According to the government's summary of the arguments presented to it over the proposed law change, one unnamed company pushed for the threshold for state ownership to be raised to 25% of a newspaper. It pointed to national security laws that currently allow foreign states to own 25% of vital infrastructure, like nuclear power plants. Such pressure to relax the rules around state ownership is a sign of the increasing role in the media played by funds backed by Gulf states. While the UAE is poised for a share of the Telegraph, Saudi Arabia is already invested in television sports rights via the streamer Dazn. The law change effectively paves the way for the Telegraph to be acquired by US fund RedBird Capital, with a minority stake held by IMI, a UAE-controlled vehicle. The Guardian understands Lord Rothermere is still in talks over his own minority stake in the Telegraph Media Group, as part of RedBird's consortium. However, the takeover has still not taken place. A Department for Culture, Media and Sport spokesperson said: 'In deciding whether to reveal the names of individual consultation respondents we must balance the public interest of transparency with the needs of commercial confidentiality. 'Our approach in finalising the foreign state influence rules will safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding.'
Telegraph
25-06-2025
- Business
- Telegraph
MPs to vote on foreign ownership of newspapers after Lib Dem rebellion
The House of Commons will vote on Labour's plan to cap foreign state ownership of newspapers at 15 per cent after MPs objected to the proposal. The Commons will be given a chance to veto the law change, which was prompted by concerns about the planned takeover of The Telegraph by an investment vehicle backed mainly by the UAE. The Labour proposal will update the previous Conservative government's complete ban on foreign states owning stakes in British newspapers. It will set the limit on foreign ownership at 15 per cent following lobbying from newspaper proprietors such as Rupert Murdoch and Lord Rothermere, the owner of the Daily Mail's parent company. But opponents have said the figure is too high and will compromise the editorial independence of newspapers by giving foreign governments power over news coverage in the UK. Ministers had hoped to pass secondary legislation on the 15 per cent cap 'on the nod' in Parliament, which would have avoided a formal vote by MPs. However, the Liberal Democrats objected to the policy on Wednesday evening, forcing a full vote in Parliament next week. The party is alone among the major Westminster factions in pushing for tougher rules against foreign state ownership and is planning a 'fatal motion' that could kill the legislation altogether when it reaches the House of Lords. The vote is the latest in a series of Government responses to the attempted takeover of The Telegraph. RedBird IMI's original plan was blocked by the Tories' outright ban on foreign state ownership. The investment vehicle, which is a joint venture between American financiers and the government of the UAE, had positioned itself to take control by paying off the bank debt of the previous owners – the Barclay family – who lost control in early June 2023. Labour announced that it would look into the outright ban and prompted uncertainty about what proportion of foreign state ownership would be allowed. This process, which is now nearing completion, contributed to the difficulty RedBird IMI has experienced in securing an onward sale of the newspaper. After an auction process and more than a year of negotiations with prospective buyers, US private equity firm RedBird Capital, the junior partner in RedBird IMI, is preparing to become the controlling owner. 'Shoddy piece of legislation' MPs have forced the Government to revise its plans by raising concerns that multiple foreign states could each take 15 per cent stakes and 'club together' to transfer control of a newspaper overseas. In a letter to peers seen by The Telegraph, ministers said this scenario was 'highly unlikely', but they are expected to publish a piece of secondary legislation making clear that the 15 per cent cap applies to all foreign state ownership combined. Lord Fox, the Lib Dem business spokesman in the House of Lords, told The Telegraph: 'In seeking to pander to pressure from foreign powers, the Government rushed out a shoddy piece of legislation that flew in the face of previous laws. 'It's taken Liberal Democrat pressure for the Government to row back on one of their many errors in this legislation. 'We welcome their belated decision to stop multiple foreign states each owning substantial stakes in our British papers – a move that could have seen malevolent actors club together to undermine our historic press freedoms. 'It is time Ministers admitted the whole thing is a mistake and withdrew the measure. That's why the Lib Dems will vote against in the Lords and call on all other peers to join with them.'
Sky News
28-05-2025
- Business
- Sky News
Daily Mail chief to pay £35m for Telegraph stake
The owner of the Daily Mail is to pay more than £30m for a minority stake in rival right-leaning newspaper The Daily Telegraph as the latter's prospective owners assemble a consortium of strategic backers. Sky News has learnt that Lord Rothermere's Daily Mail and General Trust is to fork out just under £35m for a shareholding of about 10% in the Telegraph titles, implying an equity value of roughly £350m. Banking sources said that Goldman Sachs had been enlisted to provide advice to DMGT on the investment. A deal is expected to be struck imminently, according to insiders. RedBird Capital, the US-based investment firm, confirmed last week that it was exercising an option to take majority control of the newspapers, with Abu Dhabi state-backed vehicle IMI expected to acquire the maximum 15% stake permitted under proposed new media ownership rules. The government's decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry. However, it faces continued opposition from parliamentarians. Dovid Efune, owner of The New York Sun, is meanwhile continuing to assemble a rival bid for the Telegraph, having secured backing from Jeremy Hosking, the prominent City investor. RedBird IMI paid £600m in 2023 to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine. That objective was thwarted by a change in media ownership laws - which banned any form of foreign state ownership. The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.
NZ Herald
24-05-2025
- Business
- NZ Herald
US-based RedBird Capital poised to acquire the Telegraph UK in $1b-plus deal
A rival is attempting to disrupt the sale, and regulatory hurdles await. The Telegraph, which will mark the 170th anniversary of its first edition next month, has effectively been without a proprietor for two years. Cardinale said: 'This transaction marks the start of a new era for the Telegraph as we look to grow the brand in the UK and internationally, invest in its technology and expand its subscriber base. 'We believe the UK is a great place to invest, and this acquisition is an important part of RedBird's growing portfolio of media and entertainment companies in the UK.' In recent years the Telegraph has been navigating the decline of printed newspapers by investing in building its base of paying digital subscribers. Initial rapid growth slowed after 2021 when its previous owners, the Barclay family, got into financial difficulties and applied a squeeze to extract cash. RedBird Capital is expected to allow the Telegraph to reinvest more of its profits, which at the operating level were more than £54m last year. Cardinale aims for the brand to become a force in US and global journalism, targeting an intelligent centre-right readership that is not currently well-served. He also aims to expand the Telegraph 's successful travel offering and build an events business. Telegraph editor Chris Evans said: 'The Telegraph has made enormous progress in recent years since the launch of its digital subscription strategy, thanks to the hard work of its brilliant staff and valued support of its readers. 'But there is much more that can be achieved. With the right plan and the right investment by ambitious new owners, this venerable title can look forward to an era of unprecedented success.' Telegraph Media Group chief executive Anna Jones said the company had 'exceptional journalism at its heart'. She said: 'RedBird Capital Partners have exciting growth plans that build on our success – and will unlock our full potential across the breadth of our business.' As he works to complete the consortium, Cardinale, 58, is understood to be in detailed talks with the owner of the Daily Mail, Lord Rothermere. In 2023, Lord Rothermere lined up to bid for control of the Telegraph in an abortive auction, but is now said to be discussing taking a stake just shy of 10%. Sources close to the talks said a deal would position both titles to capture savings by sharing certain costs while seeking to stay within competition and media plurality rules. Lord Rothermere's company DMGT already sells print advertising space in the Telegraph and is involved in its printing. More minority investors are expected to be named in the coming weeks before a final deal is submitted to regulators. Sources said Cardinale had lined up more backers among his British contacts in sport and media investing. The former Goldman Sachs banker has emerged as a significant dealmaker in football in recent years, with RedBird Capital the owner of AC Milan and a shareholder in Fenway Sports, the group behind Liverpool FC. Cardinale is also poised to become a bigger player in Hollywood as a backer of the US$12b ($20b) takeover of the producer and broadcaster Paramount, which owns Channel 5 in Britain. IMI, the UAE's media investment vehicle, is expected to retain a stake in the Telegraph of up to 15% as part of the plans. Under proposals by Culture Secretary Lisa Nandy, an outright ban on foreign states owning shares in newspapers, which blocked RedBird IMI's attempted takeover, is to be relaxed. The move follows lobbying by Lord Rothermere and Rupert Murdoch. They argued earlier plans for a more stringent 5% limit on foreign state investment would cut the news industry off from an important potential source of capital at a time of dizzying change. The 15% limit has split the Conservatives, who were in power when the RedBird IMI deal was blocked. The party's leadership has said it will support the higher figure but Julia Lopez, the media minister at the time of the original ban, branded Labour's decision a 'sell-out'. Lord Forsyth of Drumlean has said he will back a Liberal Democrat 'fatal motion' to obstruct the legislation and declared foreign state shareholdings a 'systemic threat to a free press'. He claimed the Government had yielded to diplomatic pressure after the UAE took offence at the decision to block RedBird IMI's attempted takeover of the Telegraph. Under the planned laws, the UAE will be barred from involvement in the running of the Telegraph as a purely passive shareholder. The Culture Secretary will have a duty to trigger an investigation of potential breaches and powers to force the country to exit its investment if it is found to have exercised influence. Cardinale's agreement in principle with IMI, which is ultimately controlled by Sheikh Mansour bin Zayed Al Nahyan, the Deputy Prime Minister of the UAE, is expected to call time on a protracted parallel sale process overseen by the investment bank Robey Warshaw. An IMI spokesman said: 'We're delighted with this announcement and know that the Telegraph has a bright future under the control of Gerry Cardinale and RedBird Capital. 'This will end the uncertainty that has been facing the Telegraph, secure its future and enable it to thrive and grow for years to come.' Robey Warshaw ran a sale process last year that was eventually nicknamed 'the newspaper auction from hell'. It was the second in the saga since the Barclay family lost control of the Telegraph in early June 2023 after a dispute with Lloyds Banking Group over £1.2b of overdue debt. Dovid Efune, the publisher of the New York Sun, emerged as the winning bidder under the Robey Warshaw process last October, but subsequently struggled to raise the necessary funds. He has persisted in what some bankers and media executives view as a quixotic quest to finance his offer, however, and last weekend made a surprise return to the fray. Efune's latest bid includes support from the former Cabinet Minister Nadhim Zahawi, who is well-connected in the UAE and was involved in the original deal between the Barclay family and RedBird IMI, and hedge fund chief Jeremy Hosking, who is the main donor to the right-wing populist Reclaim party led by the controversial actor Laurence Fox. The Efune consortium is pitching its gate-crashing attempt as a 'British bid' in contrast with RedBird Capital's more international outlook. Sources close to the process said Efune's fundraising was still not complete and that the bid included a level of debt that would be difficult to support, although he remains in discussions to sign up more supporters. Cardinale's consortium is expected to rely on debt of little over £100m, or about two years of the Telegraph 's underlying profits. The current level of borrowing is about £60m. In recent days the two men have both been meeting influential figures in London to drum up support as the battle over the Telegraph seemingly reaches its climax. In one potentially comic scene, Cardinale and Efune this week ran into each other in Parliament as they met different peers interested in the issues. While Cardinale appears favourite to prevail, there remain hurdles to completing a deal. Efune may review legal options over the Government's handling of the lengthy process, for instance. Meanwhile, regulators are likely to closely scrutinise all members of the RedBird Capital consortium and their sources of funding. Cardinale is also yet to secure final commitments from his planned co-investors. The likely involvement of a rival newspaper publisher in DMGT will also pose questions about competition and media plurality that could further complicate and lengthen the path. A full investigation by the Competition and Markets Authority could take 24 weeks, although Nandy has discretion to opt for a quicker process. Cardinale has already met senior commercial and editorial executives at the Telegraph to build relationships and discuss business plans, including utilising RedBird Capital's technology experts.
Times
23-05-2025
- Business
- Times
RedBird Capital Partners to acquire The Telegraph, ending ownership battle
The Telegraph is about to be sold to a transatlantic consortium led by RedBird Capital Partners for £500 million, ending two years of uncertainty over its ownership. RedBird Capital's founder Gerry Cardinale has signed an agreement in principle to acquire control of The Telegraph from the investment vehicle RedBird IMI, which is majority backed by the United Arab Emirates. RedBird IMI was blocked by the government from taking full ownership of The Telegraph last year after parliamentary concerns over press freedom. RedBird Capital is expected to be joined in its ownership of the Telegraph by other British media investors. Lord Rothermere, owner of Daily Mail publisher DMGT, is understood to be in talks with Cardinale over taking a stake in the business of just shy
