Sale of Daily Telegraph Collapses After US Firm Withdraws
US investment group RedBird Capital has unexpectedly pulled out of the £500m deal to acquire the Daily and Sunday Telegraph. This decision follows a series of attempts to navigate complicated regulatory environments and political concerns surrounding foreign investments in media.
Background of the Failed Acquisition
– Previous Attempts: RedBird’s earlier bid to purchase the Telegraph was rejected due to significant funding from Abu Dhabi’s IMI group, which is linked to the emirate’s royal family.
– Regulatory Changes: A recent law now limits foreign sovereign wealth funds to a maximum 15% stake in newspapers or periodicals. Although the new offer complied with these regulations, the government indicated it would still undergo a regulatory review.
Statements from RedBird and IMI Group
– A spokesperson from RedBird confirmed the withdrawal, stating: We remain fully confident that the Telegraph and its world-class team have a bright future ahead of them.
– Sources close to RedBird expressed belief that their bid would have successfully passed government scrutiny but noted that unfavorable coverage from the Telegraph newsroom influenced their decision to step back.
Future Prospects for the Telegraph
– RedBird’s founder, Gerry Cardinale, had ambitious plans to enhance the Telegraph’s presence in the US market, recognizing a gap for its content.
– The IMI Group emphasized its ongoing commitment to the newspaper’s long-term success and indicated they are still in talks with interested parties regarding a potential deal.
Conclusion
The sale of the Daily Telegraph has been plagued with uncertainty for over two years, particularly following the IMI consortium’s settlement of the debts owed by the previous owners, the Barclay family. As this chapter closes, both RedBird and the IMI Group remain hopeful for a future resolution that serves the best interests of the Telegraph’s employees and readers.