“The Labour government’s culture secretary Lisa Nandy has issued a Public Interest Intervention Notice in relation to the planned takeover,” a statement said.
The Daily Mail and General Trust (DMGT) struck a £500-million (US$682-million) deal with US-Emirati consortium RedBird IMI in November for the purchase of The Telegraph, which is 170 years old.
The tie-up has the potential to create one of the biggest right-leaning media groups in the UK.
In a statement late Thursday, a spokesman for DMGT said it welcomed the intervention notice, “which marks a significant step forward in our proposed acquisition”.
“We remain committed to investing in The Telegraph and its journalists, preserving its distinctive editorial voice and team, and accelerating its global expansion, with a focus on the US,” the statement added.
It said DMGT would work “constructively with regulators and the government to secure a timely completion of the transaction”.
The investigation will involve UK competition and media regulators.
Nandy said it was motivated by “public interest considerations” and “the need for a sufficient plurality of views in each UK market for news media”.
The investigation will also look at “the need for a sufficient plurality of persons with control of media enterprises serving every different UK audience,” she added.
The intervention revives uncertainty over the Telegraph’s future, which has been in limbo since British bank Lloyds put the paper up for sale in 2023 to pay off heavy debts accumulated by former owners Frederick and David Barclay.
RedBird IMI, a joint venture between US investment firm RedBird Capital and Abu Dhabi’s International Media Investments, had struck a deal for the Telegraph Media Group in late 2023.
However, the previous UK Conservative government triggered a swift resale given concern about the potential impact on freedom of speech due to Abu Dhabi’s press censorship record.
That government also amended merger laws to bar foreign powers from controlling UK newspapers.
RedBird then pursued the takeover under a revised structure, but abruptly dropped its bid in November.