Telegraph suitor considers legal action against UK government over rival bid | Telegraph Media Group
Men involved in a rival bid for the Telegraph are taking legal action against the government after ministers allowed the owner of the Daily Mail to take a key step to finalize a £500 million takeover.
The Telegraph newspapers, which include the Daily and Sunday editions, have been in limbo for three years after their previous owners, the Barclay family, lost control of them due to huge unpaid debts.
Last week, culture secretary Lisa Nandy lifted restrictions that prevented the Daily Mail and General Trust (DMGT), which is controlled by Daily Mail owner Lord Rothermere, from acquiring the option to buy the Telegraph.
Owning the option would mark the final step in the attempt to eventually gain control of the titles.
The option is currently held by RedBird IMI, an Abu Dhabi-backed venture which was forced to sell its Telegraph titles after a change in legislation preventing a newspaper group from becoming state-owned overseas.
But those involved in a rival bid for the Telegraph, led by the New York Sun’s British owner Dovid Efune, are understood to be currently examining a possible judicial review of the government’s decision to allow the option to be transferred.
They are concerned the decision risks damaging the outcome of months-long regulatory investigations into the sale of the Telegraph to the Rothermere group. Regulators are examining the impact of the deal on media pluralism and competition.
It is also understood there are concerns that if Rothermere’s bid is blocked, the option on the ownership of the Telegraph would effectively put it in the power to sell, giving DMGT control over which rival bids are accepted.
A consortium spokesman had no comment.
DMGT struck a deal with RedBird IMI to acquire the Telegraph titles in November, entering into a period of exclusivity.
Critics of the deal also voiced concerns A move DMGT made last October “Selling” the group’s lucrative events business, which does most of its business in Qatar and Saudi Arabia, to a new offshore parent company, Rothermere Continuation Holdings Ltd.
However, the restructuring took place before the Telegraph was launched.
DMGT said there would be no government funding in the Telegraph deal. Laws limiting state ownership are designed to prevent overseas states from “directly or indirectly controlling or influencing the policy of UK newspapers”.
Last week, Axel Springer, owner of Politico and Bild, joined Efune’s rival consortium. Also involved are Baltimore Sun owner David D Smith and British investor Jeremy Hosking.
Rothermere’s DMGT plans to complete a £500m debt deal. This figure was widely seen as a high price, but was requested by RedBird IMI, which wanted to get value for money it paid for the group.
Nandy expressed concern about further consolidation of “right-leaning” titles and the risk of the Mail and Telegraph adopting conformist editorial positions. DMGT has opposed the description of its newspapers as “right-wing”, arguing the term is vague, while regulator Ofcom will examine the impact of the deal on media pluralism.
Both the Department for Digital, Culture, Media and Sport and the DMGT declined to comment.
