RedBird Capital consortium drops £500m Telegraph bid | Telegraph Media Group

RedBird Capital has withdrawn its £500 million bid for Telegraph Media Group, throwing the future of its daily and Sunday broadcast into further uncertainty.

The private equity group founded by Gerry Cardinale has been under intense attack in recent weeks, with the Telegraph newsroom and its allies, including former editor Charles Moore and former Spectator chief Fraser Nelson, publishing a series of articles calling for an investigation into its links to China.

Culture secretary Lisa Nandy was expected to announce a decision soon on whether the tender would be allowed to go forward and would also be subject to review by media regulator Ofcom and the competition watchdog.

“RedBird today withdrew its offer for Telegraph Media Group (TMG),” a RedBird Capital Partners spokesperson said. “We have every confidence that the Telegraph and its world-class team have a bright future ahead of them and will work hard to deliver a solution that is in the best interests of staff and readers.”

RedBird Capital was the only potential buyer willing to structure a £500 million deal sought by the RedBird IMI consortium, a joint venture between RedBird and the UAE’s International Media Investments (IMI), which took control of TMG in 2023 by providing the former owners Barclay family with a loan to pay off outstanding debts to Lloyds bank.

RedBird IMI was forced to put the newspapers up for sale in April last year after the government legislated against foreign state ownership of newspaper assets in the UK. IMI is controlled by Sheikh Mansour bin Zayed al-Nahyan of Abu Dhabi, vice president of the United Arab Emirates and owner of Manchester City FC.

RedBird Capital had struck a deal that would see it retain a 15% stake in IMI after Labor eased a ban on foreign governments owning shares in UK newspapers, with Daily Mail owner and billionaire Sir Leonard Blavatnik owning around 10% each.

The potential sale, which was agreed in principle in May, was thrown into doubt last month when the Telegraph newspaper linked its putative new owner to the suspected ringleader of a Chinese spy ring in Westminster.

Daily Telegraph He published a photo dated 2024 John Thornton, chairman of RedBird Capital, shook hands with Cai Qi, a senior member of the Chinese Communist Party’s ruling politburo, raising questions about whether the British title was being crafted as a conduit for China to expand its influence.

Cai was identified as a top lieutenant of Chinese President Xi Jinping and was revealed to be the suspected recipient of intelligence on British politics that formed part of the collapsed Chinese espionage investigation.

In August, a group of nine human rights and freedom of expression organizations wrote to Nandy, urging him to stop the proposed takeover of RedBird Capital and investigate the US private equity firm’s ties to China.

They noted that Thornton sits on the advisory council of the China Investment Corporation, the country’s largest sovereign wealth fund, and also previously chaired the Silk Road Finance Corporation. A spokesman for RedBird denied any Chinese involvement or influence in the Telegraph acquisition.

Telegraph Media Group’s independent directors also warned the Department for Culture, Media and Sport over Cardinale’s alleged comments to the Telegraph’s editor, Chris Evans, in which he told her the company was prepared to “go to war” with the Telegraph’s newsroom. It is understood that the ministry is assessing whether legislation regulating editorial independence in the media has been violated.

A spokesperson for RedBird Capital said at the time: “RedBird is a private equity fund, not an owner, and the fund’s mission is to increase the value of its investments… That’s why we’ve committed to establishing an independent advisory board tasked with upholding the highest standards of journalistic integrity.”