The Abu Dhabi-backed investment fund RedBird IMI has formally abandoned its attempted takeover of The Telegraph and confirmed it will seek an onward sale via an open auction.
It said it had secured agreement from the Department of Culture to sell on the option to own the titles in a process that will be run by the advisory firms Raine of New York and Robey Warshaw, based in London.
RedBird IMI said it would also sell The Spectator magazine, either separately or in a package. Multiple parties, thought to include The Daily Mail owner Lord Rothermere and Sir Paul Marshall, co-owner of GB News, have already informally expressed interest in a new auction.
A spokesman 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.
“Our ownership would have seen the strongest editorial protections ever put forward for a UK newspaper, along with much-needed investment.
“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. Our focus now is on providing certainty to the employees and readers of The Telegraph and The Spectator, and securing best value for the assets, which remain highly attractive.
“We have held constructive conversations with the Government about ensuring a smooth and orderly sale for both titles.”
The formal withdrawal means that the Government may not be required to publish the results of investigations of RedBird IMI by the media regulator Ofcom, which were focused on its potential threat to press freedom.
Officials had been concerned that the investigation could embarrass the United Arab Emirates, which provided 75pc of RedBird IMI’s £600m outlay.
The fund swooped in December to acquire the option to own The Telegraph and The Spectator from the Barclay family by paying off approximately half their £1.2bn debt to Lloyds Banking Group.
Plans to convert the debt to ownership were derailed last month when ministers confirmed they would outlaw foreign state ownership of UK newspapers.
The onward sale of The Telegraph is expected to take some months and any new owner will also be subject to potential regulatory intervention. In the interim The Telegraph – which won Website of the Year for the second time running at the Press Awards earlier this month – will continue to be supervised by independent directors who were originally installed by Lloyds last summer.
Legal restrictions which prevent the Barclay family from exercising any control despite their status as owners of The Telegraph are expected to remain in place.
The Culture Secretary Lucy Frazer said: “The parties have signalled their intention to withdraw from the deal. 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.”
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