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The Telegraph newspaper and Spectator magazine are once again up for sale after the Abu Dhabi-backed group that had attempted to secure ownership of the British titles admitted defeat.
The UK government had blocked the sale to RedBird IMI, a US-managed fund that derives about three-quarters of its funding from Abu Dhabi, after promising to change the law to block foreign states from taking controlling stakes in UK media groups.
RedBird IMI confirmed on Tuesday that it would withdraw its offer and instead launch an auction for the newspaper and magazine to try to recoup its money. It had paid £600mn to buy debt behind the group, which could have been converted into equity ownership, from Lloyds Banking Group.
RedBird IMI said it intended to proceed with a sale of the option it owns to buy the titles after weeks of negotiations with the government.
“Our ownership would have seen the strongest editorial protections ever put forward for a UK newspaper, along with much-needed investment,” it said in a statement.
“We continue to believe this approach would have benefited the Telegraph and Spectator’s readers, their journalists and the UK media landscape more widely. Regrettably, it is clear this approach is no longer feasible.”
Culture secretary Lucy Frazer, who has overseen the government’s response, said: “Throughout this process I have raised concerns about the potential impact of this deal on free expression and accurate presentation of news, and I took steps to ensure that media freedom was protected while there was an investigation into those concerns.”
RedBird IMI has appointed Robey Warshaw and Raine Group to oversee the auction. People with knowledge of the process said that there had already been expressions of interest in both titles from around the world.
The Telegraph and Spectator could be sold together or separately, they added, depending on the offers received. New financial results are also expected soon from the Telegraph.
RedBird IMI executives are keen to at least recoup the money already spent buying the debt, the people said. The Telegraph is said to be worth at least £510mn, according to one person close to the sale, with the Spectator magazine expected to make up the remainder.
If bids are below expectations, the people said, RedBird could also seek to remain as an investor without Abu Dhabi backing, and instead bring in funds from other US investors or partner with a UK media group such as Daily Mail owner DMGT.
Legislation being finalised by the UK parliament is expected to prohibit foreign states from owning more than 5 per cent of UK print news media.
The Barclay family remains as shareholders of the titles but has no role in operations, having lost control to Lloyds last summer because of unpaid debts. Lloyds sold this debt to RedBird in the autumn, cutting short an auction of the titles that was happening at the time.
The latest auction will mean further months of uncertainty for the Telegraph, which will continue to be managed by a group of independent directors until the process is completed.
Interested parties for the Telegraph are expected to include hedge fund boss Paul Marshall, DMGT, Belgium publisher Mediahuis and regional newspaper group National World.
Most of these buyers would face scrutiny from media regulator Ofcom and the Competition and Markets Authority.
These groups could also bid for the Spectator, which has a larger list of potential buyers including Rupert Murdoch’s News UK. Spectator editor Fraser Nelson said that in the previous auctions there were 22 potential bidders.
On Tuesday, he said on X: “For how much longer will The Spectator and Daily Telegraph be in limbo? In a fast-changing market, limbo has a real cost. The 22 potential bidders painstakingly found last time can be reconvened in a heartbeat. No need to drag this out.”
