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RedBird Capital has dropped its £500m bid for the Telegraph Media Group, throwing the future of its daily and Sunday titles into further uncertainty.
The private equity group founded by Gerry Cardinale has been under intense attack in recent weeks with the Telegraph newsroom – and allies including former editor Charles Moore and ex-Spectator chief Fraser Nelson – publishing a string of pieces calling for its links to China to be investigated.
Lisa Nandy, the culture secretary, had been expected to announce a decision imminently on whether to let the bid progress and also if it should be subject to scrutiny by the media regulator, Ofcom, and the competition watchdog.
“RedBird has today withdrawn its bid for the Telegraph Media Group (TMG),” said a spokesperson for RedBird Capital Partners. “We remain fully confident that the Telegraph and its world-class team have a bright future ahead of them and will work hard to secure a solution which is in the best interests of employees and readers.”
RedBird Capital had been the only prospective buyer willing to structure a deal at the £500m value desired by the consortium RedBird IMI – a joint venture between RedBird and the UAE’s International Media Investments (IMI) – which took control of TMG in 2023 by providing a loan to pay its former owners, the Barclay family, unpaid debts to Lloyds bank.
RedBird IMI was forced to put the papers up for sale in April last year after the government legislated against foreign state ownership of UK newspaper assets. IMI is controlled by Abu Dhabi’s Sheikh Mansour bin Zayed al-Nahyan, the vice-president of the United Arab Emirates and owner of Manchester City FC.
RedBird Capital had put together a deal that would have led to IMI retaining a 15% stake, after Labour eased the ban on foreign governments owning stakes in UK newspapers, and the owner of the Daily Mail and billionaire Sir Leonard Blavatnik, with each likely to hold about a 10% stake.
The potential sale, agreed in principle in May, was thrown into doubt last month when the Telegraph newspaper itself linked its presumed new owner to the suspected ringleader of an alleged Chinese spy ring in Westminster.
The Daily Telegraph published a 2024 photograph of the chair of RedBird Capital, John Thornton, shaking hands with Cai Qi, a senior member of the Chinese Communist party’s ruling politburo, raising questions as to whether the British title was being lined up as a conduit for China to exert influence.
Cai has been described as the top lieutenant of China’s president, Xi Jinping, and has been revealed as the suspected recipient of intelligence about British politics that formed part of the collapsed Chinese spying prosecution.
In August, a group of nine human rights and freedom of expression organisations wrote to Nandy, urging her to halt the proposed RedBird Capital takeover and investigate the US private equity company’s ties to China.
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They pointed to the fact Thornton sits on the advisory council of the China Investment Corporation, the country’s largest sovereign wealth fund, and has also previously chaired the Silk Road Finance Corporation. A spokesperson for RedBird denied any Chinese involvement or influence in the proposed acquisition of the Telegraph.
The independent directors of Telegraph Media Group have also alerted the Department for Culture, Media and Sport about supposed comments made by Cardinale to the Telegraph’s editor, Chris Evans, in which he is alleged to have said that the company was ready to “go to war” with the Telegraph’s newsroom. The department is understood to be considering whether there has been a breach of the legislation governing editorial independence in the media.
A spokesperson for RedBird Capital said at the time: “RedBird is a private equity fund, not a proprietor, and the mandate of the fund is to grow the value of its investments … As such, we have committed to establishing an independent advisory board tasked with upholding the highest standards of journalistic integrity.”
