The government will allow foreign states to own stakes of up to 15% in British newspapers in a move that could finally end two years of uncertainty over the ownership of the Telegraph titles.
The Department for Culture, Media and Sport is to announce the limit on Thursday through the introduction of a new statutory instrument in parliament, ending a months-long consultation involving intensive lobbying by newspaper owners.
A 15% cap could allow Gerry Cardinale’s US private equity firm RedBird Capital to finalise a deal to buy the Daily and Sunday Telegraph.
Labour has been considering the level of ownership threshold since a law was passed last year by the Conservative government blocking foreign states or associated individuals from owning newspaper assets in the UK after an outcry over the attempted purchase of the Telegraph titles by an Abu Dhabi-backed consortium.
RedBird IMI – a joint venture between RedBird Capital and IMI, which is funded by Sheikh Mansour bin Zayed al-Nahyan, the vice-president of the United Arab Emirates and owner of Manchester City Football Club – took control of the publishing group in November 2023.
The consortium, which agreed to pay the debts of the previous owners, the Barclay family, was then forced to run an auction process to try to recoup its £500m investment when the new law made the acquisition “no longer feasible”.
The previous Conservative government had been considering a cap of 5% to 10%.
Lisa Nandy, the culture secretary, has settled on a 15% threshold after lobbying by groups including Rupert Murdoch’s News UK, the owner of the Sun and Times titles, and the Daily Mail parent company, Daily Mail & General Trust (DMGT).
The newspaper groups argued that setting the threshold too low could cut off a significant source of potential funding for the industry.
Nandy said the level of the cap would protect newspapers and news periodicals from state influence or control, while minimising any potential “chilling effect” that completely cutting off state-owned investment would have had.
“We are fully upholding the need to safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding,” said Nandy.
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“We are taking a proportionate, balanced approach. Britain’s free and independent press is a national asset like no other.”
DMGT had held talks with Qatari backers for a potential bid for the Telegraph but decided that any potential deal would probably be thwarted by competition issues.
The setting of a threshold allows RedBird Capital, which holds a 25% stake in the RedBird IMI joint venture, to fully formulate a potential deal to take over the Telegraph titles.
The US-based RedBird – which holds investments including a stake in the parent company of Liverpool FC and is seeking to jointly acquire the TV and film business Paramount – is putting together a deal that will dilute IMI’s 75% holding in the joint venture to a level acceptable to the government.
