The move comes after the UK announced it would introduce legislation to block such state-backed takeover deals in the media.
An Abu Dhabi-backed group seeking to take over Britain’s Telegraph Media Group (TMG) has announced it will pull out after the British government blocked the deal.
RedBird IMI, a joint venture between U.S.-based RedBird Capital and Abu Dhabi’s International Media Investments, struck a 1.2 billion pound ($1.5 billion) deal with TMG’s previous owners, the family, in November Barclay, completed.
The deal, which was met with opposition because of its potential impact on freedom of expression given press freedom in Abu Dhabi, called for RedBird to pay off bank debts to IMI in return for control of the media group.
However, last month the British government announced it would bring forward legislation to block such state-backed takeover deals in the industry, while Culture Secretary Lucy Frazer also considered a full regulatory investigation.
The regulatory hurdles appear to have led RedBird IMI to now abandon the venture to own and control TMG, which also owns The Spectator magazine.
“RedBird IMI confirmed today that it intends to withdraw from the proposed acquisition of Telegraph Media Group and proceed with the sale,” it said in a statement on Tuesday.
“We continue to believe that this approach would have benefited Telegraph and Spectator readers, their journalists and the wider UK media landscape.
“Unfortunately, it is clear that this approach is no longer practical.”
RedBird IMI said it now plans to provide security for the publications’ employees and readers by seeking new owners for the titles.
It said the titles “remain very attractive” to potential buyers and there was speculation they could be sold individually or as a package.
‘foundation stone’
Frazer said she “ensured that media freedom was protected while these concerns were investigated.”
“I will now allow the parties to conduct an orderly transition and I will monitor the outcome to take further regulatory action if necessary,” she added.
“The free press is a cornerstone of our democracy, and we cannot take it for granted.”
Frazer noted that the government would continue to intervene “where necessary to protect the integrity and independence of these publications given the unique role they play in our democracy.”
RedBird IMI’s original ownership plans caused an uproar in some British media circles, including some MPs in the ruling Conservative Party.
There has long been a close ideological relationship with the right-wing Telegraph titles.
The Spectator – once edited by former Tory prime minister and Brexit figurehead Boris Johnson – is widely regarded as the “Tory bible”.
Redbird IMI is majority owned by Sheikh Mansour bin Zayed Al Nahyan, Vice President of the United Arab Emirates and owner of Manchester City Football Club. It is led by former CNN president Jeff Zucker.