An Abu Dhabi-backed fund has conceded defeat in its bid to buy The Daily Telegraph after its ownership was effectively blocked by the government.
RedBird IMI announced it had placed The Telegraph and The Spectator titles up for sale, declaring that its ownership was “no longer feasible”.
The move was confirmed after ministers revealed plans last month to outlaw foreign state ownership of UK newspapers.
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The gulf state-backed fund, backed by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed al Nahyan, had reached a deal with previous Telegraph owners the Barclay family in December last year to take control of the group.
That took place through the paying off of debts owed to the family’s bank, Lloyds.
But the move sparked investigations by the Competition and Markets Authority and the media regulator and culminated in the government all but pulling the plug through an amendment to the Digital Markets, Competition and Consumers Bill.
More from BusinessA statement read: “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.
Advertisement“Regrettably, it is clear this approach is no longer feasible.”
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Sky News revealed earlier this month that RedBird IMI had been in talks with Whitehall officials over the structure of the onward sale.
Those discussions included the possibility of the Telegraph titles and The Spectator being sold separately.
RedBird said on Tuesday that it retained control over the auction process ahead and that the potential for a split would depend on the bids it received.
It also confirmed a separate story by Sky News that Raine Group, best-known in Britain for its roles in recent deals involving Manchester United and Chelsea football clubs, and Robey Warshaw had been lined up to advise the fund on the way forward.
Possible bidders for the Telegraph Media Group include the Daily Mail proprietor Lord Rothermere and the GB News shareholder Sir Paul Marshall.
Each has shown interest in owning the titles.
Image: Culture secretary Lucy Frazer initiated the regulatory scrutiny of RedBird IMI’s ownershipCulture Secretary Lucy Frazer said of RedBird’s announcement: “Throughout this process I have raised concerns about the potential impact of this deal on free expression and accurate presentation of news, and I took steps to ensure that media freedom was protected while there was an investigation into those concerns.
“I will now allow the parties to conduct an orderly transition and I will monitor the outcome with a view to taking any further regulatory action as required under the Enterprise Act.
“The free press is a cornerstone of our democracy and we cannot take it for granted. That is why I used my powers as Culture Secretary to investigate this deal.
“More widely, it is why we are banning any ownership, influence or control by foreign states of our newspapers and news magazines.
“We are acting to ensure that we retain the ability to step in where necessary to protect the integrity and independence of these publications, given the unique role they play in our democracy.”