A British stable of news publications could be split up, with The Spectator magazine sold separately from Telegraph Media titles following an intervention by the government that blocked the sale to a US fund backed by a UAE investor.
In a statement on Tuesday, RedBird IMI said it recognised its proposed acquisition was no longer feasible. The bid for The Telegraph and The Spectator was based on exercising an option to acquire the titles having bought the debt incurred by the Barclay family, who owned the UK group for about two decades.
“RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale,” the statement said. “Our ownership would have seen the strongest editorial protections ever put forward for a UK newspaper, along with much-needed investment.
“We continue to believe this approach would have benefited The Telegraph and The Spectator’s readers, their journalists and the UK media landscape more widely.
“Our focus now is on providing certainty to the employees and readers of The Telegraph and The Spectator, and securing best value for the assets, which remain highly attractive.”
Lucy Frazer, Secretary of State for Culture, Media and Sport, had invoked public interest powers to halt the acquisition last year and asked regulatory bodies Ofcom and the Competition and Markets Authority (CMA) to look into what was at stake.
It is believed that while the government intervention notice and regulatory order did not relate to The Spectator, RedBird IMI also intends to dispose of its option to acquire the weekly periodical, which has a global footprint.
The sale process begins with an exemption from Ms Frazer that would allow a RedBird IMI auction process to start.
Parties to the sale view The Telegraph and The Spectator as highly valuable and sought-after assets. They are holding out on the possibility the titles could be sold together or separately.
The nature of the sale will be shaped by the offers received and any assessment of what would deliver the best outcome for the publications, employees and readership.
After a parliamentary lobbying campaign by former editors and comment editors of The Daily Telegraph, the government also agreed to change the law to set up criteria for investing in newspapers. The bill taking forward that change is going through Parliament.
Independent directors have controlled the board of The Telegraph since the Barclay family lost control in the middle of last year to Lloyds Bank and will remain in place through to the transfer to new owners.
The British government said it would allow RedBird IMI to conduct an “orderly transition” after the company dropped the proposed buyout of The Telegraph newspaper.
“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,” Ms Frazer said.
RedBird IMI is backed by International Media Investments, based in Abu Dhabi, which has a controlling share in the US fund and is the owner of The National.
Investment bankers at Robey Warshaw and Raine Group are advising on the future sale. Parties close to the sale said significant expressions of interest not only from the UK but across Europe, US and Asia had already been received.
The type of potential buyer ranged from high-net-worth individuals to institutional investors and included strategic buyers of print media assets.
