The sale of The Telegraph is expected to move forward after government legislation permitting foreign states to hold up to 15% stakes in British newspapers survived a critical vote in the House of Lords. The bill, introduced by the previous Conservative administration, originally set the limit at zero, but the current government has amended it to allow passive stakes of up to 15%.
A consortium led by RedBird Capital, a US private equity firm, is poised to acquire the Telegraph Media Group for £500 million. The deal would see the United Arab Emirates retain a 15% stake through International Media Investments (IMI), which is controlled by Sheikh Mansour bin Zayed Al Nahyan, the UAE's vice-president. RedBird Capital has stated it can fully fund the acquisition independently if needed.
On Tuesday, Liberal Democrat peers attempted to block the legislation with a rare 'fatal motion', the strongest opposition available in the House of Lords. After nearly three hours of debate, peers voted 267 to 155 to reject the motion, allowing the 15% cap to become law. However, a further statutory instrument will be required after the parliamentary recess in September to prevent foreign investors from acquiring multiple 15% stakes in British newspapers.
No final deal has been signed, and the takeover will face regulatory scrutiny, including a public interest test by Culture Secretary Lisa Nandy and a full investigation by the Competition and Markets Authority. Despite these hurdles, the government's victory in the Lords is expected to prompt RedBird Capital to formally announce its bid in the coming weeks.
RedBird Capital, which holds investments in Liverpool FC's parent company and is pursuing a joint acquisition of Paramount, has indicated it would become the sole controlling investor of The Telegraph. It plans to bring on British partners with small stakes, including the owner of the Daily Mail and Len Blavatnik, owner of Warner Music and Dazn.
