A consortium led by the US private equity company RedBird Capital has agreed to buy the Telegraph for £500m, ending two years of uncertainty over the future ownership of the titles.
The company’s founder, Gerry Cardinale, has signed a deal in principle that will take the Daily Telegraph and Sunday Telegraph under the ownership of a consortium that includes British investors.
“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, The Guardian reports.
“We believe the UK is a great place to invest (and) we have tremendous conviction in the growth potential of this incredibly important cultural institution.”
RedBird, which said it would become the sole controlling owner, has been in talks with potential investors including Lord Rothermere’s DMGT, the owner of the Daily Mail, Metro and New Scientist, about taking a stake of 9.9%.
Rothermere, who tried to buy the titles in 2004, pulled out of the auction last summer because DMGT feared it would be pulled into a long and complex battle over competition issues and political hurdles.
Any deal with DMGT, which already handles the printing and advertising sales for the Telegraph, would probably primarily relate to shared cost-savings in order to remain within competition and plurality rules.
RedBird said it was in talks with “select UK-based minority investors with print media expertise”.
While RedBird is expected to be joined by additional investors, the deal for the Telegraph is fully funded and not contingent on them coming onboard.
RedBird Capital – which holds various investments including a stake in the parent company of Liverpool football club and is seeking to jointly acquire the TV and film business Paramount – is buying Telegraph Media Group from RedBird IMI.
The US private equity group contributed a quarter of the funding to RedBird IMI, with 75% funded by International Media Investments (IMI).
IMI is controlled by Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the United Arab Emirates and the owner of Manchester City.
RedBird IMI was forced to put the titles back up for sale last spring after the British government passed a law blocking foreign states or associated individuals from owning newspaper assets in the UK.
The Abu Dhabi-based RedBird IMI took control of the publishing group in November 2023 after agreeing to pay debts owed by the previous owners, the Barclay family, to Lloyds Banking Group.
IMI is to retain a minority investment in the Telegraph and last week the government said it would allow foreign states to own stakes of up to 15% in British newspapers.
Last week, the Liberal Democrats said they would seek to stop the proposed legislation via a rare “fatal motion”, the strongest opposition that can be taken in the House of Lords, which would block the government and force it to reintroduce the legislation.
The move could split the Conservatives, who blocked the RedBird IMI deal when they were in power and had been considering a cap of 5% to 10%, but there are unlikely to be the numbers to allow the fatal motion to pass.