Telegraph newspaper back up for sale after Abu Dhabi-backed fund pulls deal

RedBird IMI agreed a deal last year, but faced fierce criticism from politicians

The Daily Telegraph (Jonathan Brady/PA) (PA Archive)

The gulf state-backed fund behind a takeover of the Telegraph newspaper group has said it will now withdraw and sell on the business after politicians moved to block the deal.

RedBird IMI, an Abu Dhabi-backed fund, last year reached a deal with previous Telegraph owners the Barclay family to take control of the newspaper group – and fellow publication The Spectator – by paying off debts owed to their bank, Lloyds.

However, last month the Government said it would bring forward legislation that would block such state-backed takeover deals in the industry.

Culture Secretary Lucy Frazer had previously also launched a probe into the deal, due its potential impact on freedom of speech.

In response, media watchdog Ofcom raised concerns IMI, the Abu-Dhabi based majority owner of RedBird IMI, could influence “the accurate presentation of news and free expression of opinion in the Daily Telegraph and the Sunday Telegraph newspapers” if a takeover went ahead.

RedBird IMI is an investment fund majority-owned by Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates (UAE) and owner of Manchester City Football Club.

It also backed by US investment management firm RedBird Capital and is led by former CNN boss Jeff Zucker.

The Culture Secretary probed the proposed takeover of the Telegraph newspapers by Abu-Dhabi backed fund RedBird IMI (Jonathan Brady/PA) (PA Archive)

A spokesman for the fund said: “RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale.

“We continue to believe this approach would have benefited the Telegraph and Spectator’s readers, their journalists and the UK media landscape more widely.

“Regrettably, it is clear this approach is no longer feasible.”

It said it now plans to bring certainty to employees and readers of the publications by seeking new owners for the titles.

RedBird IMI said the titles “remain highly attractive” to potential suitors. It is understood the Telegraph and Spectator could be sold separately or as a package.

The Government has granted derogations allowing the fund to undertake the process and will not be involved itself.

Culture Secretary Ms Frazer said: “Throughout this process I have raised concerns about the potential impact of this deal on free expression and accurate presentation of news, and I took steps to ensure that media freedom was protected while there was an investigation into those concerns.

“I will now allow the parties to conduct an orderly transition and I will monitor the outcome with a view to taking any further regulatory action as required under the Enterprise Act.

“The free press is a cornerstone of our democracy and we cannot take it for granted.

“We are acting to ensure that we retain the ability to step in where necessary to protect the integrity and independence of these publications, given the unique role they play in our democracy.”

Despite the collapse of the deal, RedBird IMI will continue to operate in the UK and agreed a £1.15 billion takeover of All3Media – the TV production company behind The Traitors and Fleabag – earlier this year.