*

RedBird decided to withdraw on Friday morning, source says

*

The decision ends months of negotiations and scrutiny

*

Proposed deal had drawn criticism over foreign influence

(Adds details from source in paragraphs 2, 5 and 9, Telegraph

comment in paragraph 8)

By Sam Tabahriti

LONDON, Nov 14 (Reuters) - U.S.-based private investment

firm RedBird Capital Partners on Friday pulled out of a

500-million-pound ($671-million) bid for Britain's Telegraph

Media Group, the latest twist in a two-and-a-half year saga at

one of Britain's biggest newspapers.

A source close to RedBird told Reuters that sustained

internal opposition from senior figures within the Telegraph

newsroom had prompted it to walk away on Friday morning.

The move ends months of negotiations and regulatory scrutiny

over the future of the right-leaning broadsheet, which has been

in flux since a RedBird-IMI joint venture acquired it and The

Spectator magazine in 2023, only for the then government to

intervene and ban foreign state investment in UK newspapers.

RedBird then sought to formally request approval from the

government to proceed with the acquisition under a revised

structure, with the Abu Dhabi-backed IMI participating as a

minority investor capped at 15%.

But the source said the regulatory clearance process had

also been slower than expected, contributing to doubts about the

timeline and feasibility of the acquisition. RedBird pulled out

before any final regulatory decision had been communicated.

REDBIRD HAD WANTED BROADSHEET TITLES AND MAJOR WEBSITE

Telegraph Media Group is the publisher of the Daily

Telegraph and Sunday Telegraph newspapers plus a news website,

which is one of the biggest in Britain.

"Our immediate priority is to minimise disruption to the

business and work with all stakeholders, including (the

government's media department), towards a solution," a

spokesperson said.

RedBird founder Gerry Cardinale had already been in

discussions with other potential investors as part of the

consortium model he was building, and could quickly re-engage,

the source said.

RedBird, which manages about $12 billion in assets globally,

said its conviction in the potential of the Telegraph "never

wavered" when making the formal request to acquire it, despite

challenges facing journalism, including AI and social media

disruption.

Britain's Department for Culture, Media and Sport declined

to comment following RedBird's withdrawal.

Giao Pacey, a media lawyer at Simkins, said the collapse of

the deal underscored the growing complexity of media ownership

in politically sensitive sectors, where regulatory uncertainty

and reputational risks can derail even well-structured

transactions.

SCRUTINY OVER FOREIGN INFLUENCE

Some campaigners and media commentators had urged the

government to examine the deal's implications for editorial

independence and media plurality.

The proposed takeover had drawn criticism over foreign

involvement, with questions raised about IMI's ties to the UAE

government and RedBird's international affiliations, including

links to China.

Luke de Pulford, executive director of the

Inter-Parliamentary Alliance on China, told Reuters the

withdrawal marked a victory for those concerned about foreign

influence in UK media.

"The Telegraph does need to survive, and find a way out of

its current limbo, but not at the cost of its freedom," he said.

RedBird had denied any Chinese involvement in its bid and

said it would safeguard editorial independence through an

advisory board.

($1 = 0.7451 pounds)