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RedBird Capital Partners has agreed to buy the Telegraph Media Group in a £500mn deal, signalling an end to one of the most protracted and tortuous sales of a British newspaper in recent history.
RedBird said the deal would make it the sole controlling owner, leaving Abu Dhabi’s IMI with a minority stake, after the British government changed the law to stop the newspaper from becoming owned by a foreign state-backed fund.
The process to sell the Telegraph was kicked off two years ago when Lloyds Banking Group seized control from the Barclay family, which had owned the business since 2004, because of unpaid debts.
A deal struck to buy the Telegraph Media Group by RedBird IMI, a separate joint venture with three-quarters of its funding from Abu Dhabi, for about £550mn was then blocked by the former Conservative government. Backbenchers worried about giving a foreign state control of an influential British newspaper had lobbied against that deal.
The UK government last week confirmed plans to cap foreign state ownership of British national newspapers at 15 per cent, with IMI expected to take the full allotment open to the Abu Dhabi-backed group.
Redbird is still in talks with a number of UK-based investors to join a consortium, including Lord Rothermere’s DMGT, which owns the Daily Mail and could take about 10 per cent, according to people familiar with the matter.
RedBird is expected to use about £100mn in debt finance, giving the deal an enterprise value of £500mn.
It wants to invest in the group’s digital operations to drive subscriptions, and bring in greater use of artificial intelligence tools. RedBird also wants to grow the brand internationally, with a focus on the US, where it envisages potential tie-ups with its roster of media and sports assets.
Gerry Cardinale, founder and managing partner of RedBird, said: “This transaction marks the start of a new era for The Telegraph as we look to grow the brand in the UK and internationally, invest in its technology and expand its subscriber base.”
Cardinale said he would work with the UK government and regulators to complete the acquisition process, which will face scrutiny under public interest, competition and media plurality rules.
The deal is also likely to face criticism from politicians in the UK, some of whom have been vocally opposed to foreign states owning any stakes in British national newspapers.
For the deal to proceed, the government will also need to lift the block imposed at the end of 2023 that in effect prevented the debt acquired by RedBird IMI from being converted into equity ownership.
The Financial Times first reported the new bid to take control of the newspaper by Cardinale and the involvement of Rothermere.
The group has become one of the largest investors in UK media, sports and entertainment, partly through its close links with Abu Dhabi in RedBird IMI.
Last year, RedBird IMI acquired All3Media, the UK’s largest independent TV production company and RedBird itself separately owns a stake in Premier League club Liverpool, and will also have control of the UK’s Channel 5 if Skydance’s merger with Paramount Global is cleared by regulators in the US.
