Redbird Capital Partners has dropped its £500m bid to take control of The Telegraph six months after saying it had struck a deal to do so.
Redbird decided to ditch its plan following regulatory uncertainty and negative publicity in The Telegraph itself.
Who owns the Telegraph?
Redbird had originally bought The Telegraph as part of Redbird IMI by agreeing a deal to pay off £1.2bn in Barclay family debts.
Redbird IMI still owns The Telegraph but due to an intervention notice filed by the Government it has no governance in the publication. This is split between independent directors appointed by the DCMS, the Telegraph Media Group board, and the DCMS.
Redbird IMI must now still find a new owner to recoup at least some of its investment. The Telegraph has been in ownership limbo since Lloyds Banking Group effectively repossessed the business in June 2023 over the Barclay debts.
The original Redbird IMI bid, majority funded by the United Arab Emirates, remains technically active. But it would be a breach of a new UK law banning foreign states from owning more than 15% of UK newspapers.
What next for the Telegraph?
Telegraph chief executive Anna Jones told staff on Friday: “I will now work with the board of independent directors on next steps and what this means for the future ownership of the business.
“This process has been challenging and unpredictable but your hard work and continued patience is a credit to you all.”
A Redbird Capital Partners spokesperson said: “Redbird has today withdrawn its bid for the Telegraph Media Group.
“We remain fully confident that the Telegraph and its world-class team have a bright future ahead of them and we will work hard to help secure a solution which is in the best interests of employees and readers.”
The Telegraph itself called for “a new, expedited and transparent sale process to make sure that IMI, a media company owned by the United Arab Emirates, sells its call option against our company to a committed and suitable buyer that will care as much about The Telegraph as we do”.
It said culture secretary Lisa Nandy must facilitate this process which should include a number of “undertakings”:
“First, speed: with print sales in decline across the industry, and with AI replacing online search, undermining digital business models, we no longer have time to waste. The Telegraph needs to be able to take strategic decisions to ensure our future, and to be able to count on a buyer committed to investing in our business. The auction needs to take place and be completed over the next three months.
“Next, price: it is important that the auction does not include a reserve price so high as to prevent The Telegraph from being sold at the market rate for newspapers of its kind. IMI, which is being forced to sell its call option under the legislation banning foreign states from controlling British newspapers, had previously insisted on an excessive minimum price that only RedBird was willing to match, and which would have required dangerously high levels of debt, almost certainly jeopardising investment. The value of newspapers is declining, and the auction must reflect this.
“Third, transparency: any party showing an interest must be prepared to identify the full beneficial ownership of the funds they want to deploy. There should be no subsequent dispute over whether or not equity or debt are derived from foreign state sources. The auction itself should proceed openly.
“Fourth, pre-qualification: to ensure that we don’t end up with another unsuitable buyer, thus leading to the ultimate failure of yet another auction and delaying everything even further, it is important shortlisted bidders are deemed, at least tentatively, to be suitable well before the end of the process.”
Who could buy the Telegraph?
IMI Redbird is likely now to sell the Telegraph to the highest bidder and try to get as close as its can to the £500m asking price. Bids have so far valued the Telegraph at £300m to £350m. The title made turnover up 1.2% to £279.4m in 2024 and operating profit down 0.2% to £54.6m.
GB News investor and Spectator owner Sir Paul Marshall could resurrect his bid. The Telegraph would fit well with a media empire which also includes the website Unherd.
Lord Saatchi and Lady Lynn Forester de Rothschild could resurrect their previous £350m bid for the title.
New York Sun owner Dovid Efune was reportedly backed by a variety of investors for his bid to buy Telegraph.
David Montgomery and Chelsea football club owner Todd Boehly could revive their joint bid for the Telegraph (first reported in March this year).
News Corp could pay a premium for the Telegraph as it would give it dominance in the UK broadsheet newspaper market and pave the way for expansion in the US alongside existing right-leaning titles Fox News and the New York Post.
Daily Mail-owning DMGT could revive its bid for the Telegraph. It already collaborates with the Telegraph on ad sales.
Former Telegraph editor Will Lewis previously expressed an interest in buying the Telegraph only to instead become CEO of the Washington Post in November 2024.
What went wrong with Redbird’s £500m Telegraph bid?
US-based private investment firm Redbird announced in May it was buying The Telegraph after the failed joint bid with International Media Investments due to the latter’s Abu Dhabi government backing.
IMI was allowed to own up to 15% under new legislation restricting foreign state ownership of newspapers and Redbird was bringing in further investment from Mail and Metro owner DMGT and DAZN owner Sir Leonard Blavatnik.
However, the deal still needed approval from the UK Government before it could be finalised.
This month Redbird managing partner Gerry Cardinale issued a plea to get the bid over the line, giving assurances over The Telegraph’s editorial independence by promising to create an independent advisory board.
Redbird had already hired the FT’s head of digital platforms and strategy Matthew Garrahan as operating partner, news and entertainment based in London, leading to rumours that it wanted him to replace Telegraph editor Chris Evans or possibly install him as publisher of the title.
The Telegraph has reported that Cardinale told Evans he would “go to war” with the newsroom over its enquiries into the deal.
The Telegraph has also been reporting on Redbird’s alleged links to both China and the United Arab Emirates.
This week more than 30 peers sent a letter to Nandy saying she must investigate because the bid met the legal threshold of “reasonable grounds for suspecting” a foreign state could gain influence over the title.
Just days ago a Redbird spokesperson said its plan for The Telegraph was “to invest in its high-quality journalism and retain and attract the very best talent to unlock growth, both in the UK and globally”.
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