The United Arab Emirates-backed group that proposed a £600m acquisition of the Telegraph Group is walking away, after it claimed new legislation made the acquisition “no more feasible”, which triggered a new auction of the paper group.
RedBird IMI, a partnership supported by Sheikh Mansour Bin Zayed al-Nahyan – the UAE vice-president – and US investment firm RedBird Capital Partners, has decided to put the newspaper group up for sale. Several high-profile bidders are expected.
RedBird IMI took over the Telegraph and Spectator magazines in December, when it repaid the Barclays’ debts. This included a £600m credit against the titles.
Redbird IMI has confirmed that it is walking away from the deal because of the British legislation which will prevent foreign states and associated individuals owning newspaper assets within the UK. was considered that the deal between Redbird and the British government would never happen since legislation was proposed informally last month .
Many Tory MPs, peers and others who were concerned about the free speech rights raised their concerns against the planned Redbird IMI acquisition of the Telegraph. The Telegraph is widely regarded as the official journal of the Conservative Party.
In the past, the UAE, who provides financial support for 75% Redbird IMI has been criticized for violations of press freedom. The government was prompted to draft the legislation in response to the concerns. It is expected that the law will become law within the next few weeks.
Redbird IMI’s bid for the Telegraph last year sparked interest from over 20 parties. However, it was stopped after Redbird IMI presented its proposal. The Daily Mail, General Trust and Paul Marshall, founder of the hedge fund and GB News’s backer, are expected to show a lot of interest. News UK, owned by Rupert Murdoch, has expressed interest in acquiring The Spectator.
Redbird IMI stated: “Under our ownership, we would have been able to provide the most robust editorial protections for UK newspapers and make much-needed investments.
We continue to believe that this approach would benefit the readers of the Telegraph and Spectator, their journalists and UK media more broadly.
It is regrettable that this approach is not feasible. We are now focused on providing certainty to employees and readers of The Telegraph and The Spectator and securing the best value for assets that remain highly attractive.
The company stated that it had “constructive discussions” with the government to ensure a smooth, orderly and efficient sale of these titles.
RedBird IMI owns a £600m debt that was owed to Lloyds Bank by an indirect holding of the Telegraph & the Spectator. It also has an option to purchase the shares of the companies holding Telegraph & Spectator.
Redbird has been advised in its sale by the bank Raine and Robey Warshaw that employs former chancellor George Osborne.
Lucy Frazer has lifted the regulatory order that was imposed by the Culture Secretary last year, which had put the Redbird IMI transaction on hold until regulatory scrutiny could be conducted. Her decision allows Redbird IMI the opportunity to sell the option to purchase the Telegraph group.
The Telegraph and Spectator could be sold separately. The Barclays remain owners of the titles, but they have no involvement in the management of the newspaper group. IMI is a lending company to the holding company for Very Group, the retailer that is the last remnant of Barclays once-vast corporate empire. IMI also considers an auction for Very Group, according to in the Times.
Frazer stated: “The parties have indicated their intention to pull out of the deal. I raised concerns throughout this process about the possible impact of this agreement on free expression and accurate news presentation. I took steps to protect media freedom while an investigation was conducted into these concerns.
“I will allow the parties to make an orderly transition. I will then monitor the results and take any additional regulatory actions as required by the Enterprise Act.”