Jeff Zucker's Redbird IMI Drops Bid for Telegraph Group

The former CNN chief's media investment firm RedBird IMI said Tuesday it is auctioning its rights to the UK's Telegraph newspaper and Spectator Magazine after its $1.4 billion attempt to buy the influential conservative publications was essentially blocked.

"RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale," a RedBird IMI said in a statement to Reuters. "We have held constructive conversations with the government about ensuring a smooth and orderly sale for both titles."

The goal now is to get the best price for the publications, the statement said.

The United Arab Emirates-backed firm already had several bidders interested in the titles, Bloomberg reported. It was the Abu Dhabi financing that led the UK government to move toward changing its laws to ban majority foreign ownership of its newspapers and magazines, preventing the RedBird IMI takeover.

RedBird IMI is a joint venture funded by RedBird Capital Partners and International Media Investments, an investment vehicle backed by UAE Vice President Sheikh Mansour bin Zayed Al Nahyan, a prominent member of Abu Dhabi's ruling family. He also owns the Manchester City soccer team.

The Telegraph and Spectator are both historically linked to Britain's Conservative Party, with the daily paper sometimes referred to as the "Torygraph."

"Our ownership would have seen the strongest editorial protections ever put forward for a UK newspaper, along with much-needed investment," RedBird IMI told Bloomberg. "We continue to believe this approach would have benefited the Telegraph and Spectator's readers, their journalists and the UK media landscape more widely."

The months-long buyout attempt saga saw RedBird IMI provide a series of loans valued at around $1.5 billion to the Barclay family, which owns the publications but had lost control to its lender, Lloyd's Banking Group. Lloyd's put the outlets up for sale and RedBird IMI was expected to take control of the company by converting the loans to equity when the British government stepped in.

The new sale is expected to draw interest for the Telegraph from the publisher of the rival Daily Mail and the UK company National World PLC, which publishes the Yorkshire Post, Bloomberg reported. Reuters noted hedge fund boss Paul Marshall also previously expressed interest.

The Spectator could draw bids from News Corp., the Murdoch-controlled company that owns the Wall Street Journal and New York Post.