RedBird IMI boss flies in for talks with regulator over Telegraph deal

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RedBird IMI boss Jeff Zucker has met Ofcom officials in London to make a last pitch to win regulators over to its £600mn takeover of the Telegraph Media Group.

The meeting on Friday with the US investment group at Ofcom’s headquarters comes ahead of a crucial report, due before the end of the month, giving the media regulator’s recommendations to the government about the sale.

RedBird IMI, which is backed by money from Abu Dhabi, has been answering questions from Ofcom through an official “request for information” process about its takeover of the Telegraph, which was announced in November. 

The meeting between Zucker and Ofcom officials was part of this process to answer any final questions, according to people familiar with the details, and offer direct assurances that the group would safeguard the newspaper’s independence.

The Telegraph deal was held up after culture secretary Lucy Frazer announced a review because of concerns that the newspaper would be under the control of Abu Dhabi, which has a poor record on press freedom.

RedBird IMI executives are still confident the deal will go ahead despite concerns among Conservative MPs and journalists at the Telegraph, as well as anger among the rival media groups that were bidding for the newspaper.

In the next few weeks, the independent directors currently running TMG are looking to move the assets of the Telegraph group to a new entity in a corporate restructuring. As part of the sale process, TMG chief executive Nick Hugh is expected to stand down, according to people familiar with the matter. TMG declined to comment. Hugh was not available for comment.

Anna Jones, the former boss of media group Hearst in the UK, was among the internal candidates to replace Hugh, if he stands down, the people said. Jones was brought in last year to advise the senior management team at TMG.

RedBird IMI managed to short circuit an auction process of the newspaper and its magazine stablemate, the Spectator, by agreeing to repay the debts of the original owners, the Barclay family, which had prompted lender Lloyds to seize control of the assets.

The Abu Dhabi-backed group has promised to create an editorial charter overseen by independent media executives as part of legally binding governance structure. The Telegraph’s editor would be protected from interference in decisions, including hiring journalists.

International Media Investments, an Abu Dhabi vehicle controlled by the Manchester City owner Sheikh Mansour bin Zayed bin Sultan al-Nahyan, has made separate assurances to Ofcom. It owns about three quarters of RedBird IMI, which is run by former CNN boss Zucker and former Goldman Sachs executive Gerry Cardinale.

The commitment by RedBird IMI stipulates that “no one from IMI, RedBird or RedBird IMI will seek to influence journalists or journalism” at the Telegraph, with binding legal undertakings to the government to cement IMI’s status as a passive investor, with no role in operational or editorial matters.

An IMI spokesperson said: “This is a business investment for us and we will play no part in the running of the Telegraph or the Spectator.”

Ofcom will make recommendations to Frazer by January 26, which will inform her decision to either allow the deal to proceed, order a further phase 2 investigation or block the deal.

Some analysts say a phase 2 investigation appears likely given it would delay having to make a final decision. It is unclear whether RedBird IMI would be prepared to wait for the conclusion of this process.

If the deal were to fall apart, RedBird IMI would be able to sell the business. given its control of the debt and an agreement that it can convert this into TMG equity.