§ Mr. Archie Hamiltonasked the Secretary of State for Trade whether he has yet received an application from 5W Lonrho for his consent to its takeover of The Observer newspaper; whether he will refer that takeover to the Monopolies and Mergers Commission; and if he will make a statement.
§ Mr. BiffenOn 16 March I received an application from Lonrho Limited seeking my consent to the transfer ofThe Observer newspaper to its subsidiary, George Outram & Company Limited, from Observer International Inc., a subsidiary of Atlantic Richfield Company. The application was conditional upon my consent to the transfer without a reference to the Monopolies and Mergers Commission under section 58(3) of the Fair Trading Act 1973.
On 20 March I informed Lonrho that, in the light of all the relevant circumstances, I had decided that I should not give my consent in this case without a report from the commission. As the application was conditional on my consent without a reference I was obliged to reject it, but I invited the company to submit an unconditional application, which would allow me to refer the proposed transfer to the commission. I made it clear that my decision entailed no view on the merits of the proposed transfer.
On the same day, Mr. Rowland, managing director of Lonrho, announced that in order to avoid uncertainty which he believed would be occasioned by a reference, he had decided by agreement with Atlantic Richfield to acquire personally 50 per cent. of the shares in Observer International. No application was submitted for my consent to these revised arrangements. However, following discussions between my legal advisers and those of Lonrho and Mr. Rowland, the company announced on 26 March that Atlantic Richfield and Mr. Rowland had decided not to proceed with these arrangements. Instead, Lonrho would submit a revised application for consent in a manner which allowed the proposed transfer to be referred to the commission. The following day I received an unconditional application for my consent to transfer of The Observer to George Outram & Company Limited and immediately referred the matter to the commission for investigation and report. The commission has promised to use its best endeavours to produce a speedy report.