Telegraph Group takeover passes public interest test

LONDON – Patricia Hewitt, the trade and industry secretary, has said she will not intervene in the Barclay brothers' takeover of the Telegraph Group on public interest grounds.

The news emerges just days after the Office of Fair Trading said it was deciding whether to review the deal on competition grounds, paving the way for a conclusion to the long running battle for The Daily and Sunday Telegraph.

The 2003 Communications Act introduced a public interest test to be carried out by Ofcom in addition to competition tests. The Telegraph takeover would have been the first media deal to be subject to the tests but Ofcom officials said they would not examining it and were pleased because they deemed it to be a political minefield.

The public interest test is thought to be more subjective than decisions taken purely on competition grounds. It is designed to ensure a newspaper or broadcaster's new owner is a good employer, believes in the fair and accurate presentation of news and will not interfere in editorial decisions.

The Barclays were expected to pass the public interest test because of their hands-off management style.

It was revealed yesterday that the Office of Fair Trading had given third parties until August 27 to submit comments about whether the takeover of the group, which also includes The Spectator, would affect competition in the market.

Insiders claimed the Barclays were expected to satisfy competition issues because their ownership of The Scotsman and The Business is not considered to be significant enough to make them a dominant force in the market.

Associated Newspapers, which owns the Daily Mail, and Rupert Murdoch's News International, which publishes The Sun and The Times, are among those expected to comment on the deal.

The Telegraph Group unveiled a £118m loss for 2003, the result of writing off £145m on an inter-company loan instigated by the group's former owner, Lord Black.

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