Media giant The Telegraph is set to be acquired by a transatlantic consortium led by New York-based RedBird Capital Partners.
The ‘significant investment in journalism’ will end two years of uncertainty after a £500m deal has been agreed in principle by RedBird’s founder, Gerry Cardinale.
Despite this, no final agreements are in place.
RedBird IMI, which is majority backed by the United Arab Emirates and controlled by Manchester City owner Sheikh Mansour bin Zayed Al Nahyan, had a previous deal blocked by the government when it was denied full ownership of the publication last year after concerns regarding press freedom.
Now, RedBird Capital, which provided a quarter of RedBird IMI’s funding and has a plan to accelerate The Telegraph’s growth worldwide, is closing in on a deal to take direct control.
The Telegraph says the investment group is expected to be joined in the ownership group by British media investors.
However, the deal is still subject to regulatory approvals and a rival is said to be attempting to disrupt the sale.
“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,” said Cardinale.
“We believe the UK is a great place to invest, and this acquisition is an important part of RedBird’s growing portfolio of media and entertainment companies in the UK.”
In recent years, The Telegraph has responded to the decline in print newspaper readership by focusing on growing its base of paying digital subscribers.
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Although this strategy initially saw strong momentum, growth began to taper off after 2021 when the Barclay family, the paper’s former owners, encountered financial troubles and sought to extract more revenue.
With RedBird Capital now involved, the publication is expected to reinvest a larger portion of its earnings – last year’s operating profit exceeded £54m – and Cardinale has plans to position The Telegraph as a leading voice in US and international journalism.
The aim is to attract an intellectually engaged, centre-right audience that he believes is currently underserved.
He also intends to expand the company’s thriving travel segment and develop a new events division.
Cardinale, also a backer of the $12bn takeover of Paramount, is said to be in negotiations with The Daily Mail owner, Lord Rothermere, who attempted to bid for control of The Telegraph in 2023 but is now reportedly discussing taking a stake under 10 per cent.
IMI is set to retain a stake of up to 15 per cent.
The Telegraph says that more minority investors are expected to be named in the coming weeks before a final deal is submitted to regulators.
Chris Evans, the editor of The Telegraph, added: “The Telegraph has made enormous progress in recent years since the launch of its digital subscription strategy, thanks to the hard work of its brilliant staff and valued support of its readers.
“But there is much more that can be achieved. With the right plan and the right investment by ambitious new owners, this venerable title can look forward to an era of unprecedented success.”
Having met with senior members of The Telegraph’s team, Cardinale continued: “Having now spent time with Chris Evans, Anna Jones (chief executive of Telegraph Media Group) and the entire senior management team at The Telegraph, we have tremendous conviction in the growth potential of this incredibly important cultural institution.”