The US private equity firm RedBird Capital is confident of tabling a deal to take control of the Daily and Sunday Telegraph as soon as next month, in an attempt to end two years of “paralysis and unhappiness” at the 170-year-old titles.
The firm’s founder, Gerry Cardinale, is personally involved in drafting a plan to either form a consortium or self-fund a takeover at Telegraph Media Group, the Guardian understands.
RedBird Capital was part of the joint venture with Abu Dhabi-based IMI that took control of the publishing group in November 2023 after agreeing to pay debts owed by the previous owners, the Barclay family, to Lloyds Banking Group.
However, the RedBird IMI consortium – which was 75%-funded by Sheikh Mansour bin Zayed al-Nahyan, the vice-president of the United Arab Emirates and owner of Manchester City football club – was forced to put the titles back up for sale last spring after the British government passed a law blocking foreign states or associated individuals from owning newspaper assets in the UK.
Since then RedBird IMI has been running an auction process, led by investment banks Raine and Robey Warshaw, at which former chancellor George Osborne is a partner. However, a buyer has so far failed to emerge who is willing or able to stump up the £500m it is seeking to recoup its full investment.
Sources say RedBird Capital is “confident of securing a deal in the coming months”. “The uncertainty can’t go on,” said one source familiar with RedBird Capital’s plans. “It is time to bring it to an end.”
RedBird Capital – which holds various investments including a stake in the parent company of Liverpool FC and is seeking to jointly acquire TV and film business Paramount – has talked with UK parties that have shown various levels of interest in a Telegraph deal, sources said.
These are understood to include Lord Rothermere’s DMGT, owner of the Daily Mail, Metro and New Scientist, which tried to buy the Telegraph in 2004. It pulled out of the latest auction last summer because DMGT feared it would be pulled into a long and complex battle over competition issues and political hurdles. However, it remains a potential suitor as part of a consortium.
RedBird Capital, which would become the lead investor of any consortium because it already partly controls the newspapers with IMI, is also understood to have enough financial resource to backstop a deal on its own.
IMI is keen to retain an investment in the Telegraph. However, the government has not yet determined what level of ownership foreign states will be allowed to have in UK newspapers. The previous Conservative government, which introduced legislation that forced the titles to be put up for sale again, had been looking at a 5% to 10% level.
Lisa Nandy, the culture secretary, has been considering the issue since the general election last July. She is reportedly looking at a level of 10% to 15% after taking on board arguments from publishers such as DMGT and Rupert Murdoch’s News UK which have lobbied that setting the threshold too low could cut off a significant source of potential funding for the industry.
While the almost two-year saga over the Telegraph’s ownership has not affected daily publishing, sources said that staff and management, led by chief executive Anna Jones, have felt “paralysed and unhappy” at effectively not being able to make strategic decisions.
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Meanwhile, RedBird IMI is continuing to hold talks with other potential suitors including Chelsea FC owner Todd Boehly, who has in turn been holding talks about a joint bid with David Montgomery, the executive chair of National world, which owns titles ranging from the Scotsman to Yorkshire Post.
Dovid Efune, the owner of the New York Sun, who entered a short period of exclusive takeover talks late last year before failing to raise funds, is also seeking new backers to launch a fresh bid.
Lord Saatchi, the advertising mogul, previously offered to buy the Telegraph newspapers in 2023 for about £350m.
The uncertainty over the Telegraph’s future began when Lloyds took control of the media group due to unpaid debts by the Barclay family.
Twin brothers Frederick and the late David Barclay bought the Telegraph titles and Spectator for £665m in 2004. The family loans were bought by Lloyds as part of its takeover of HBOS during the financial crisis in 2008. The Spectator was sold for £100m to GB News investor Paul Marshall last September.
Source: theguardian.com
