The US businessman who fronted a UAE-backed consortium’s failed £600m attempt to buy the Telegraph group has said he should have taken a different approach to the deal and immediately snapped up the Spectator magazine, after the takeover collapsed under political pressure.
Jeff Zucker, a former CNN chief executive, now runs RedBird IMI, which last week announced it was walking away from its planned deal for the newspaper group after saying the transaction was “no longer feasible” because of new legislation that would block foreign states from owning newspaper assets in the UK.
Zucker, speaking at the Wall Street Journal CEO Council summit in London, said that in hindsight there were two things he would have done differently in the proposed bid for the Telegraph group. He said he would have closed the deal for the Spectator, which the group owns, right away as that was not subject to the same regulatory scrutiny as the Telegraph.
He said RedBird IMI, a partnership backed by the UAE’s vice-president, Sheikh Mansour bin Zayed al-Nahyan, and the US investment firm RedBird Capital Partners, had not done so because it had agreed the Telegraph and Spectator deals would go through at the same time and it was working with the regulators. “We were being good citizens,” he said.
Zucker said he would have also structured the deal differently by changing the percentage of the owners of the entities that were within the RedBird IMI partnership. “Looking back in hindsight we did not fully appreciate the need to do either of these moves at that time,” he said.
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The planned RedBird IMI takeover of the Telegraph, widely seen as the house journal of the Conservative party, had been fiercely opposed by many Tory MPs and peers who raised concerns about free speech.
The UAE, which provides the financial backing for 75% of RedBird IMI, has been criticised in the past for breaches of press freedom. The concerns prompted the government to draw up the legislation which is expected to become law in the coming weeks.
RedBird IMI effectively took control of the Telegraph newspapers and the Spectator magazine in December when it repaid the debts of their owners, the Barclay family, including a £600m loan against the titles. Its withdrawal from a full takeover of the business will trigger a fresh round of bidding from interested parties.
Zucker said that, since the sale process started last week, “interest has been pretty robust” from potential bidders including from those outside the UK. “We are confident there is enough serious interest in this and we will do well,” he said, adding of the sales process: “In the next two to three months it’ll work itself out.”
Last year’s auction for the Telegraph attracted interest from more than 20 parties but was halted after RedBird IMI made its proposed offer.
Interested bidders this time are expected to include DMGT, which owns the Daily Mail, and Paul Marshall, the hedgefund founder and backer of GB News, who has already shown interest in the Telegraph. The Rupert Murdoch-owned News UK has been linked to a deal for the Spectator.
RedBird is being advised by the banks Raine and Robey Warshaw – which employs the former chancellor George Osborne – in the sales process.
Zucker said RedBird IMI had made a planned bid for the Telegraph and Spectator because they were “terrific brands”, and such assets rarely become available. He added that the Telegraph was a good business but had suffered from a serious lack of investment in the past decade. RedBird IMI’s plan had been to help expand the Telegraph globally, particularly in the US, he said.
The UAE-backed consortium has made a number of acquisitions including a £1.15bn deal to buy All3Media, the production company behind Fleabag and the Traitors. All3Media has more than 50 different labels and has produced some of the most popular TV shows of recent years, including Squid Game: The Challenge, Midsomer Murders and Call the Midwife.
Zucker said the All3Media deal closed next week and that RedBird would continue to look for suitable acquisitions.
