- By Michael Race
- Business reporter, BBC News
image source, Getty Images
The Daily and Sunday Telegraph newspapers are back up for sale after an Abu Dhabi-backed takeover bid collapsed.
Legislation has since been brought forward to ban foreign states from owning British newspapers and news magazines.
RedBird said it would halt the takeover and put the media company up for sale.
The investment firm said its plans were “no longer feasible”, adding that it would now look to secure the “best value” for the titles, which include the Spectator magazine.
“We have held constructive discussions with the government to ensure a smooth and orderly sale of both titles,” it said in a statement.
The Abu-Dhabi-backed deal for the Telegraph was largely financed by Sheikh Mansour bin Zayed bin Sultan al-Nahyan, the owner of Manchester City Football Club and vice president and deputy prime minister of the United Arab Emirates (UAE).
But concerns were raised by MPs and some of the paper’s current and former journalists, as well as readers, that the title could fall under the control of an authoritarian foreign state.
The government said the legislation would “provide additional protection for a free press”.
On Tuesday, RedBird said the consortium’s ownership would have seen “the strongest editorial protection ever put forward for a British newspaper, along with much-needed investment.”
But it added: “Under the legislation’s definition of foreign power, it will not be possible for RedBird IMI to proceed with its proposed takeover of the Telegraph and Spectator.”
The group said its independent directors appointed to lead the Telegraph and Spectator last summer would remain in place until the sale process is completed.
Culture Minister Lucy Frazer said she had “raised concerns about the potential impact of this deal on freedom of expression and the accurate presentation of news”.
Fraser added that she would “allow the parties to complete an orderly transition”.
The Telegraph and Spectator magazine were put up for sale last year when they were seized by Lloyds Banking Group from long-time owners the Barclay family, who had defaulted on a loan of more than £1bn.
Lloyds began an auction process, but at the last minute the Barclay family paid off their debt with money lent by Sheikh Mansour bin Zayed al-Nahyan, and in return the Barclay family agreed to transfer ownership to the Gulf-backed consortium.
RedBird said on Tuesday it had £600m of debt in the titles.
The Gulf states have been very significant investors in the UK in recent years. UAE-based investors have poured billions into ports, housing projects, wind farms and science parks and are being courted for an investment in a new nuclear power station at Sizewell in Suffolk.
Previous bidders for the Telegraph included hedge fund tycoon Sir Paul Marshall, who owns GB News, Daily Mail owners DMGT and Rupert Murdoch’s News UK.
