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Murdoch’s News Corp. Eyes Joint Telegraph Bid With Rivals

Murdoch’s News Corp. Eyes Joint Telegraph Bid With Rivals
Copies of The Daily Telegraph newspaper on a newsstand in a shop in London, UK, on Thursday, June 8, 2023. The Telegraph newspapers and Spectator magazine could be sold, after a unit of Lloyds Banking Group Plc appointed receivers to a holding company and removed Barclay family members as directors of the media companies.

Rupert Murdoch’s News Corp. and the publisher of the UK’s Daily Mail tabloid are weighing an offer for the company that owns the Telegraph newspaper and Spectator magazine, alongside United Arab Emirates-backed investment fund RedBird IMI, people familiar with the matter said.

Such a bid would reduce RedBird IMI’s ultimate stake in the Telegraph Media Group Ltd. and may ease UK government concerns over control of the legacy media outlet, said the people, who asked not to be identified because the discussions are private. Jonathan Harmsworth’s Daily Mail & General Trust Plc and News Corp.’s News UK unit have held back-channel conversations on how to structure a deal, they said.

The discussions are preliminary and it isn’t clear whether parties would reach an agreement and whether they could ultimately split up the assets, they said. Murdoch has coveted the Spectator for decades, and has previously bid for it, Bloomberg reported last year.

“DMGT is not involved in any discussions with News Corp. about taking a stake in the Telegraph,” a DMGT spokesperson said.

A representative for News UK declined to comment. A spokesperson for RedBird IMI said it isn’t involved in the discussions and declined to comment further. RedBird IMI, fronted by former CNN chief Jeff Zucker, has been approached by a number of parties interested in teaming up, but is focused on buying the paper outright, one of the people said.

The nearly 170-year-old Telegraph newspaper and the Spectator magazine have out-sized influence in British politics, and are seen as a mouthpiece for the UK’s governing Conservative Party. The potential for a foreign government to gain control over the assets — via UAE Deputy Prime Minister Sheikh Mansour’s majority holding in RedBird IMI — has caused an uproar in Westminster.

Conversations about a bid began after a Conservative backlash to RedBird IMI’s takeover offer, people familiar with the situation said. Mansour’s involvement sparked concerns from Prime Minister Rishi Sunak’s cabinet, Bloomberg previously reported.

The UK’s Department for Culture, Media and Sport is expected to make a decision on whether to refer RedBird IMI’s offer for a more in-depth review in the coming days, and on Wednesday, the House of Lords will weigh an amendment that could give Parliament veto power over foreign state control of media properties.

RedBird IMI — a joint venture between a New York investment firm — had agreed last year to provide loans of about £600 million ($750 million) to gain control of the Telegraph and Spectator from the Barclay family. The titles, which form part of a complex ownership structure, were seized from the family after they fell behind on debt payments.

A fourth rival bidder, hedge fund manager Paul Marshall, may be excluded from the joint proposal, the people said. Marshall declined to comment. News UK is interested in the Spectator rather than the Telegraph titles, a person familiar with its thinking said, though at this early stage it’s not clear exactly what form the structure would take and who would control which assets.

While a joint bid could ease concerns about the UAE’s involvement, it may raise new issues for media plurality and competition if Harmsworth and Murdoch took on more interest in UK news titles.

Under one scenario that has been discussed, RedBird IMI would take a stake as low as 25% in the Telegraph in an attempt to satisfy concerns about foreign state interference, the people familiar with the talks said. DMGT and News UK have previously proposed a joint venture to combine their printing operations.

Meanwhile, opposition Labour leader Keir Starmer is concerned about foreign state ownership of British news outlets but is not at this stage actively opposing the RedBird IMI bid, a person familiar with his thinking said, contradicting a statement that Shadow Culture Secretary Thangam Debbonaire made this weekend about the Labour party’s plans to oppose the takeover.

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