UK slashes UAE's hopes of acquiring The Telegraph
3 Min Read
Britain's government announced intentions last week to prohibit foreign governments from owning newspapers due to concerns regarding the media's independence.
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A woman reads a copy of The Daily Telegraph newspaper in London, on May 21, 2009. (AFP)
Britain said on Tuesday that it will submit the UAE-led acquisition of The Telegraph to a long assessment, ultimately killing the transaction since a rule prohibiting foreign governments from owning newspapers is set to take effect in the coming months.
Britain's government announced intentions last week to prohibit foreign governments from owning newspapers due to concerns regarding the media's independence and the role of foreign players in purchasing politically significant properties.
Stephen Parkinson, the House of Lords' culture minister, told the House of Lords, "We will amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states."
Abu Dhabi-backed RedBird IMI acquired The Telegraph titles and The Spectator magazine in December to help settle the Barclay family's 1.2 billion pound ($1.5 billion) debt to Lloyds Bank (LLOY.L), but the transaction requires regulatory clearance.
British MPs and journalists have passionately protested the UAE's ownership of The Telegraph, sometimes known as the "Torygraph" because of its longstanding backing for the right-leaning Conservative, or Tory Party. They argue that the ownership of one of Britain's most prominent newspapers by a foreign state, notably the UAE, would jeopardize press freedom.
In response, the government said last week that it will enact legislation prohibiting foreign nations from holding newspapers.
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Lucy Frazer, the media secretary investigating the takeover's compliance with competition and media ownership regulations, said on Tuesday she was considering referring it to a long investigation based on factual news presentation and free expression.
Ofcom, the media regulator, discovered that Abu Dhabi's IMI may have an interest in affecting "the accurate presentation of news and free expression of opinion in the Daily Telegraph and Sunday Telegraph newspapers."
The parties have until March 25 to make their submissions before she sends the transaction to the Competition and Markets Authority.
According to Frazer, the restriction on foreign governments holding newspapers will take effect within the next several months.
She told LBC Radio on Tuesday, "If the Telegraph case is still live, it will affect it."
