The gulf state-backed fund behind a takeover of the Telegraph newspaper group has said it will now withdraw and sell on the business after politicians moved to block the deal.
RedBird IMI, an Abu Dhabi-backed fund, last year reached a deal with previous Telegraph owners the Barclay family to take control of the newspaper group – and fellow publication The Spectator – by paying off debts owed to their bank, Lloyds.
However, last month the Government said it would bring forward legislation that would block such state-backed takeover deals in the industry.
Culture Secretary Lucy Frazer had previously also launched a probe into the deal, due its potential impact on freedom of speech.
In response, media watchdog Ofcom raised concerns IMI, the Abu-Dhabi based majority owner of RedBird IMI, could influence “the accurate presentation of news and free expression of opinion in the Daily Telegraph and the Sunday Telegraph newspapers” if a takeover went ahead.
RedBird IMI is an investment fund majority-owned by Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates (UAE) and owner of Manchester City Football Club.
It also backed by US investment management firm RedBird Capital and is led by former CNN boss Jeff Zucker.
A spokesman for the fund said: “RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale.
“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.”
It said it now plans to bring certainty to employees and readers of the publications by seeking new owners for the titles.
RedBird IMI said the titles “remain highly attractive” to potential suitors. It is understood the Telegraph and Spectator could be sold separately or as a package.
The Government has granted derogations allowing the fund to undertake the process and will not be involved itself.
Ms Frazer, addressing the Society of Editors conference in central London on Tuesday afternoon, said the Government had brought forward the legislation to block the deal to ensure the law was not “exploited”.
She said: “In this case, I had concerns about the potential impacts of this deal on free expression and accurate presentation of news and that’s why I issued a public interest intervention.”
Later on in her address, she said: “The law needed to be strengthened, strengthened to stop it being exploited in a way that would undermine one of the cornerstones of our country.
“As a result of our changes, the Bill now bans absolutely any foreign state ownership, control, or influence over the newspaper enterprise.”
Finishing her address to the conference, Ms Frazer told the audience: “We do not want to interfere, but to strengthen. We want to get involved in doing what needs to be done. Because, contrary to what Andrew Neil says and thinks, whilst you may not always be on our side, we are on yours. We have your back. Democracy needs a free press.”
She added: “I want you to know that this Conservative Government will always stand on the side of newspapers, and they will always ensure that the press is free to speak the truth.”
Despite the collapse of the deal, RedBird IMI will continue to operate in the UK and agreed a £1.15 billion takeover of All3Media – the TV production company behind The Traitors and Fleabag – earlier this year.
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