Redbird abandons £500m Telegraph bid

(Sharecast News) - US investment firm RedBird Capital abandoned its £500m bid to acquire the Telegraph Media Group (TMG) on Friday, ending months of uncertainty over the future ownership of the Daily and Sunday Telegraph and forcing the once-prestigious titles back into limbo. RedBird confirmed the withdrawal, saying it would "work hard to help secure a solution which is in the best interests of employees and readers".

The move unravelled a deal first agreed in principle in May, and marked the latest setback in a two-year saga triggered when the Barclay family lost control of the titles after defaulting on debts.

It came amid mounting regulatory uncertainty and growing opposition from within the Telegraph newsroom.

The paper had published a series of articles highlighting alleged ties between RedBird and Chinese state interests, including claims involving the firm's chairman John Thornton.

Although RedBird had denied any Chinese influence on the bid, the reporting intensified political scrutiny, with MPs and peers calling for the deal to be referred to Ofcom and the Competition and Markets Authority.

Lisa Nandy, the culture secretary, had been preparing to decide whether the restructured proposal should face a full public-interest investigation.

The deal had already been reshaped to comply with new legislation limiting foreign state ownership of UK newspapers to a maximum 15%, reducing the stake held by Abu Dhabi-owned International Media Investments (IMI), RedBird's partner.

The original RedBird-IMI bid was blocked last year amid concerns about overseas state influence.

Despite support from prospective minority investors including Daily Mail publisher DMGT and billionaire Sir Leonard Blavatnik, opposition within the Telegraph played a central role in the collapse.

Senior editors had raised concerns over foreign involvement and the potential impact on editorial independence.

Staff were told on Friday that the process "has gone on far, far too long" and that a new buyer who "cares about journalism" must now be found quickly.

The withdrawal raised the likelihood of another auction in the new year, with the titles entering a third year without a permanent owner.

The government was also expected to consider whether the earlier RedBird-IMI proposal, still technically active, should be examined by the competition watchdog under new rules designed to guard against foreign state influence in the press.

Reporting by Josh White for Sharecast.com.