London's Telegraph Media Group to be acquired by Abu Dhabi-backed fund
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London: The Spectator magazine and the sister newspapers The Daily and Sunday Telegraph in Britain are about to be taken up by RedBird IMI, an investment fund backed by Abu Dhabi, which announced on Monday.
A deal for a "package of loans" totalling £600 million ($750 million) has been reached by RedBird IMI, a joint venture between US company RedBird Capital and Abu Dhabi's International Media Investments, to acquire ownership of the Telegraph Media Group.
The Barclay family has owned the parent firm of the right-leaning titles for almost 20 years, but due to outstanding debts, it was placed up for sale earlier this year.
RedBird IMI has declared that it will settle all outstanding debts to Lloyds Banking firm, enabling the media firm to be released from receivership, AFP reported.
A further "similar" sized loan secured by the Telegraph and Spectator titles will also be converted into equity, the joint venture stated in its statement.
That would eventually grant it ownership of the Telegraph Media Group, pending regulatory approval.
According to the joint venture, IMI would simply be "a passive investor" while Redbird Capital, led by renowned media executive and former CNN president Jeff Zucker, would manage the magazines "alone."
The guarantees come after a group of Conservative legislators, as reported by the Financial Times on Sunday, urged the government to look into Abu Dhabi's involvement in the takeover using UK national security laws.
The five Tory MPs questioned the idea of allowing foreign sovereign wealth funds to purchase national newspapers in letters addressed to business secretary Kemi Badenoch, culture secretary Lucy Frazer and deputy prime minister Oliver Dowden, the statement stated.
RedBird IMI's spokesperson revealed the financial agreements in a statement on Monday, stating that it will “provide a loan to the value of £600 million, secured against the Telegraph and Spectator.”
“Any transfer of ownership will of course be subject to regulatory review and we will continue to co-operate fully with the government and the regulator,” he said.
“Following transfer of ownership, RedBird Capital alone will take over management and operational responsibility for the titles under the leadership of RedBird IMI chief executive Jeff Zucker.”
The spokesman added the joint venture was “entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications” to protect their “reputation and credibility.”
In 2004, twin brothers Frederick and David Barclay paid £665 million to purchase Telegraph Media Group.
However, because of "debts being in default and with no sign they would be repaid," lender Bank of Scotland stated in June that it had appointed a receiver for the group's Bermuda-based holding company.
The statement at the time stated that talks to "find a consensual solution and repayment" of the borrowing, which was reportedly worth £1 billion ($1.2 billion), had taken place before the financial advising firm AlixPartners was appointed as a "last resort."
