American buyout firm RedBird has agreed a deal to take control of the Daily and Sunday Telegraph after a two-year ownership vacuum.
RedBird Capital will buy the stake owned by Emirati royal Sheikh Mansour bin Zayed Sultan al-Nahyan who had bankrolled an earlier bid.
In a bold but ultimately unsuccessful move, a consortium of RedBird and Sheikh Mansour’s IMI paid off the Barclay brothers’ debts in full hoping to shortcut the auction process.
The BBC understands the purchase price will see RedBird IMI get its money back in full.
Among other investments, RedBird Capital owns the Italian football team AC Milan.
After two years without an owner, American buyout firm RedBird has reached an agreement to take over the Daily and Sunday Telegraph.
The Emirati royal Sheikh Mansour bin Zayed Sultan al-Nahyan, who had funded an earlier bid, will sell his stake to RedBird Capital.
When the previous government passed a law prohibiting foreign governments from owning British newspapers or news magazines, it rejected that bid.
Regulators must approve the current proposed deal.
After the Barclay family failed to pay their outstanding debts, Lloyds Bank seized the Telegraph titles and the Spectator magazine and put them up for auction.
A group led by RedBird and Sheikh Mansour’s IMI paid off the Barclay brothers’ debts in full in an attempt to speed up the auction process, but it was a daring but ultimately unsuccessful move.
However, because IMI provided nearly all of the consortium’s funding, the government stepped in to stop it from acquiring majority ownership.
IMI is expected to hold a minority stake in the two papers, less than 15 percent.
Sir Paul Marshall, a billionaire hedge fund manager, purchased the Spectator for £100 million last year.
The BBC is aware that RedBird IMI will receive a full refund for the purchase price.
The two-year limbo period that the Telegraph staff found unsettling and that left them worried that there wasn’t enough investment and direction is now over.
Gerry Cardinale, the creator of RedBird, told the BBC that he sees a market niche in the US and plans to increase the Telegraph’s audience and subscriber base there.
The Italian football team, AC Milan, is owned by RedBird Capital, among other investments.
