Labour is to allow the United Arab Emirates – an autocratic foreign government – to own up to 15% of the Telegraph, three times the level envisaged when Parliament passed the legislation last year. The Telegraph has more.
The Culture Secretary Lisa Nandy will on Thursday propose secondary legislation which will set the maximum stake in a newspaper permitted for a foreign state.
The threshold of 15% is three times the level originally proposed by the Conservatives before last year’s General Election.
The increase follows lobbying by the publishers of the Times and the Daily Mail, Rupert Murdoch and Lord Rothermere. Their representatives argued that the previously planned 5% maximum would cut off the industry from deep-pocketed sovereign investors at a critical time as it navigates the final years of print.
Ms Nandy has been considering how to proceed since a consultation closed in July last year.
It came after an attempted takeover of the Telegraph by RedBird IMI, an investment vehicle mostly backed by the UAE, was blocked by an outright ban on foreign state ownership. It 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.
RedBird IMI made a loan to the family, secured against the Telegraph and the Spectator magazine, which it planned to convert into ownership until the Government changed the law.
Uncertainty over what proportion of foreign state capital might be allowed has contributed to the difficulty RedBird IMI has experienced in securing an onward sale of the newspaper.
It said it would exit its investment over a year ago and ran an auction process. However, it did not produce a buyer able to pay the price required by the UAE to recoup its outlay on the Telegraph of more than £500 million.
The junior partner in RedBird IMI, the US private equity firm RedBird Capital, is now preparing to become the controlling owner.
With Ms Nandy’s expected decision, IMI, the UAE’s media investment vehicle, is expected to seek to retain a 15% stake. It is likely to attract regulatory scrutiny if and when a deal is agreed. …
The Gulf state was angered by the decision to block its takeover, which contributed to a serious deterioration in diplomatic relations with the UK. Sir Keir Starmer has sought to rebuild ties, including with a visit to Abu Dhabi in December.
Fraser Nelson, a Times columnist who fought the UAE takeover as editor of the Spectator, said Ms Nandy’s expected decision to raise the threshold was “appalling”. RedBird IMI sold the Spectator to the GB News co-owner Sir Paul Marshall last year for £100 million.
Mr Nelson posted on X: “Allowing autocratic regimes to own 15% of newspapers – moving dictatorships into the role of co-owner – would violate the principle of Parliament’s vote last year and be a step back for democracy.”
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