The Government has stepped into the controversial prospective takeover of The Telegraph by an Abu Dhabi-backed media company by issuing a Public Interest Intervention Notice (PIIN) that will halt the process until at least January. It means the regulators Ofcom and the Competition and Markets Authority (CMA) will carry out an investigation into the potential takeover by Redbird IMI, which is lending the Barclay family money to pay off its debts to Lloyds Banking Group.
Under the deal, some £600 million of this loan would be converted into equity, securing ownership of The Telegraph titles and The Spectator, circumventing the auction that had been under way. The Barclay family lost control of the papers in June when Lloyds appointed receivers in an effort to recoup its loans. A number of media groups have expressed an interest in bidding for the titles but the Redbird IMI move scuppered the plan.
With concern growing both inside the papers and at Westminster over their potential ownership by a foreign state, Lucy Frazer used her powers under the Enterprise Act 2002 to issue the PIIN. But this does not mean the takeover has been blocked.
The CMA will report on jurisdictional and competition matters, while Ofcom will consider whether the takeover would hinder the accurate presentation of news and free expression of opinion in newspapers. Ms Frazer has asked for reports from both by January 26. In the meantime, management decisions will continue to be taken by a trio of independent directors appointed by Lloyds.
It is expected that Redbird IMI will offer undertakings about editorial freedom, yet it is hard to see how these can be guaranteed. Since Abu Dhabi’s involvement became known, journalists who have worked there and politicians like Lord Hague have said the Gulf state has no cultural predisposition to free speech.
This episode has been unsettling for the readers of The Telegraph who are understandably worried that the independence of the newspapers will be compromised if they pass into the hands of a foreign state, even at arm’s length. They may rest assured that our editorial integrity will be upheld while this procedure is undertaken.
The final decision on whether the takeover should proceed, and in what form, is a political one. It needs to be taken in a way that recognises the importance of a free press to a healthy democracy.