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Gerry Cardinale’s RedBird Capital Partners is drawing up plans to take control of the Telegraph in an attempt to bring an end to the protracted two-year sale of the British newspaper group, people briefed about the matter said.
Under plans still being evaluated, the US private equity firm would reduce the stake of Abu Dhabi-based IMI in order to overcome objections from the UK government over having overseas sovereign wealth owning a majority of a British newspaper.
RedBird has held talks with a number of UK-based media and investment groups to take part in a consortium, they added, although the US fund manager would be the lead investor.
RedBird has also spoken with potential partners that have expressed interest in the newspaper in the past, including Lord Rothermere’s DMGT, which owns rival Daily Mail.
The intervention by Cardinale, who is set to take over media group Paramount together with David Ellison’s independent Hollywood film studio Skydance, would bring to a close one of the longest-running sales of a media group in British history.
A spokesman for RedBird said: “Gerry Cardinale’s RedBird Capital Partners is evaluating the possibility of becoming the sole-control owner of the Telegraph Media Group.” DMGT declined to comment.
The sale of the newspaper was kicked off two years ago when Lloyds Banking Group seized control as a result of unpaid debts by the Barclay family, which had owned the Telegraph since 2004.
A deal struck to buy the Telegraph Media Group by RedBird IMI, a joint venture between the US private equity firm and the Abu Dhabi investor, for about £550mn was then blocked by the former UK Conservative government owing to concerns over passing control of an influential newspaper to a foreign state-backed fund.
RedBird IMI remains in talks with other potential buyers, including a group comprising Chelsea FC co-owner Todd Boehly and British newspaper veteran David Montgomery. Dovid Efune, owner of the New York Sun, has also held talks with new investors to back a fresh bid for the newspaper, according to people close to the talks.
However, Cardinale would probably be in the driving seat for a deal if he decided to proceed, according to people, given he already partly controls the newspaper with IMI.
RedBird manages $12bn of assets across its global portfolio of sports, media and entertainment, and financial services companies. RedBird IMI is advised by boutique investment banking advisers Robey Warshaw and Raine.
Under the deal struck last year, IMI injected three-quarters of the money, with RedBird contributing the rest. RedBird IMI — run by former CNN chief Jeff Zucker — wants to at least recoup the money it has spent on the agreement.
In the past rival media groups, private equity investors and wealthy individuals including Lord Saatchi, the Conservative peer, have expressed interest in the newspaper.
