RedBird Capital Withdraws from Daily Telegraph Acquisition Deal
RedBird Capital, a US investment firm, has officially withdrawn from its acquisition bid for the Daily and Sunday Telegraph. This deal was valued at £500 million and follows previous complications involving foreign investment regulations.
Background on the Acquisition Attempt
This latest attempt by RedBird marks a significant moment in the ongoing saga surrounding the Telegraph’s ownership. Initial efforts faced resistance due to the involvement of Abu Dhabi’s IMI group, linked to the Abu Dhabi royal family.
Regulatory Challenges
Recent changes in UK law require foreign sovereign wealth funds to limit their stakes in local media outlets to 15%. Although RedBird’s new proposal adhered to this limit, the government planned to review the deal for regulatory compliance.
Statements from RedBird Capital
A spokesperson for RedBird stated, “We remain fully confident that the Telegraph and its world-class team have a bright future ahead of them.” The firm emphasized its commitment to finding a solution beneficial for employees and readers alike.
Concerns and Withdrawal
Despite confidence that the bid would clear the government review, internal opposition from the Telegraph newsroom was a key factor for RedBird’s withdrawal. Critics raised concerns over the firm’s investment connections with China and Gulf countries.
Future of the Daily Telegraph
The IMI Group, which had been involved in the previous acquisition efforts, remains focused on concluding a sale. An IMI spokesperson mentioned priorities include ensuring long-term success for the Telegraph while cooperating with government regulations.
RedBird’s Broader Strategy
Gerry Cardinale, RedBird’s founder, has expressed goals to broaden the Telegraph’s reach and increase its subscriber base, particularly in the US market, recognizing an opportunity in this area. RedBird is also known for its investment in the Italian football club AC Milan.
Impact on Ownership Transition
The Daily Telegraph has been in a state of uncertainty for over two years. This follows RedBird and IMI’s efforts to clear the debts left by the previous owners, the Barclay family. The future of the newspapers now lies in the hands of potential buyers and ongoing regulatory discussions.
