UK scrutiny deepens on Abu Dhabi-backed RedBird IMI's Telegraph bid

The proposed acquisition of the Telegraph Media Group (TMG) by Abu Dhabi-backed investment group RedBird IMI faces further scrutiny by UK regulators due to a newly proposed corporate structure. Culture Secretary Lucy Frazer has raised concerns about the new holding company structure intended to hold the newspaper group, prompting her to ask Ofcom and the Competition and Markets Authority (CMA) to assess whether it constitutes a materially different deal requiring a new investigation.
RedBird IMI, led by former CNN chief Jeff Zucker, had already been facing scrutiny from Ofcom regarding potential public interest concerns related to press freedom and accurate news presentation under Abu Dhabi's involvement. The regulator's report was expected this week, but the new government intervention could postpone the process by several weeks.
The revised corporate structure aims to clarify International Media Investments (IMI), an Abu Dhabi entity controlled by Manchester City owner Sheikh Mansour, as a passive investor with no management or editorial influence over the Telegraph. However, the late introduction of this information and its implementation raise concerns for Frazer, prompting her to question the transparency of the process.
RedBird IMI acquired the Telegraph in a swift agreement with the group's previous owners, the Barclay family, by settling their debts, bypassing a potential auction process. This move, along with IMI's involvement, has faced considerable opposition from Conservative MPs, rival media groups, and even some Telegraph and Spectator staff concerned about editorial independence and press freedom under Abu Dhabi's partial ownership.
RedBird IMI has emphasized its commitment to editorial autonomy by proposing an independent editorial charter and legal measures to safeguard IMI's passive investor status. Nonetheless, the government remains concerned about potential IMI influence on the Telegraph's news presentation and free expression of opinion. Their letter to RedBird IMI highlights unresolved points where IMI consent is still required under the partnership agreement.
Analysts predict that Frazer may refer the deal to the CMA for a deeper investigation due to press freedom concerns surrounding the takeover by the Abu Dhabi-backed group.