RedBird Capital Withdraws from Newspaper Acquisition Deal
The investment company RedBird Capital has officially withdrawn from its acquisition attempt of the Daily and Sunday Telegraph, initially valued at £500 million. This decision marks a significant turn in the ongoing saga of the Telegraph’s ownership, which has faced scrutiny and legislative challenges.
Background of the Acquisition Attempt
RedBird made an earlier bid to acquire the Telegraph, which was heavily criticized due to its financing from the IMI group. This group is backed by the Abu Dhabi royal family. A change in UK law had restricted foreign sovereign wealth funds from holding more than a 15% stake in media outlets, prompting RedBird to revise its approach.
Regulatory Challenges and Withdrawal
The government indicated it would review the revised bid despite its compliance with the new stake limitation. RedBird Capital announced its exit from the deal, emphasizing their confidence in the future of the Telegraph and its staff. A spokesperson for RedBird stated, “We will work hard to help secure a solution that is in the best interests of employees and readers.”
Concerns Over Media Sentiment
While sources close to RedBird believe the bid would have navigated the government review successfully, negative coverage from the existing Telegraph newsroom influenced their decision to withdraw. Continuing questions about RedBird’s financial ties to investors from China and the Gulf region have also emerged.
IMI Group’s Ongoing Involvement
IMI Group, which had initially partnered with RedBird, assured that its priority remains securing the Telegraph’s long-term success. The group continues to engage with potential buyers while cooperating with regulatory bodies.
Future Plans for the Telegraph
Despite the setback, RedBird Capital’s founder, Gerry Cardinale, had proposed strategies to enhance the Telegraph’s reach and subscriber base in the U.S. market, identifying a potential gap. RedBird’s investment portfolio also includes notable assets like the Italian football club AC Milan.
The situation surrounding the Daily Telegraph has been precarious for over two years, particularly since RedBird and IMI addressed the debts amassed by previous owners, the Barclay family, with the intention of eventually taking control of the newspapers.
