The Barclay brothers have overcome another obstacle in their proposed purchase of the Telegraph titles after Government ministers said the deal would not be subject to a public interest examination.
It is understood that the Department of Trade and Industry told Sir David and Frederick Barclay yesterday that the Secretary of State, Patricia Hewitt, would not intervene in the £665 million deal, which was agreed in June after months of fierce bidding (see
Barclay Brothers Take Control Of Telegraph Titles).
The Barclay brothers still have to pass a final hurdle in the form of an investigation by the Office of Fair Trading into the competition issues raised by the deal. The twins have already taken ownership of the Telegraph titles, but could be forced to sell if the transaction fails the test.
It was revealed yesterday that the Office of Fair Trading has given third parties until 27 August to submit comments about whether the take-over of the Telegraph group, which also includes The Spectator, would reduce competition.
It is widely expected that the Barclay twins will not face any significant competition issues given that their ownership of The Scotsman and The Business is not considered enough to make them a dominant force in the national newspaper market.
However, some of the Telegraph Group’s failed bidders would almost certainly have raised public interest and competition concerns. The Daily Mail & General Trust would probably have failed on plurality grounds, while Richard Desmond’s Express Newspapers could have fallen foul of editorial interference.
The Telegraph take-over is the first major media deal to be concluded under the regulations set out by the Government’s recently passed Communications Act. The legislation gave Ofcom extensive powers to investigate the public interest implications of media mergers deemed to raise competition concerns by the Department of Trade and Industry.
Patricia Hewitt’s decision to clear the Barclay brothers suggests that relatively few media mergers will be subject to a public interest test, which is in-line with the original intention of the Government’s recently passed Communications Act to deregulate the media market.
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