The high-profile auction for the Telegraph Media Group is set to re-open as Abu Dhabi-backed investment fund Redbird IMI is reportedly poised to withdraw its £600m bid for the as early as next week.
Redbird IMI is working to finalise a structure for the sale with government ministers, who are hoping to cling on to some oversight of the newspaper, according to insiders close to the Financial Times.
A solution could potentially involve separate sales of the Telegraph and The Spectator magazine.
In March, the UK government thwarted an attempt by Redbird IMI to buy the papers, which were put up for sale last year after previous owners the Barclay brothers defaulted on £1.1bn worth of debt.
The withdrawal, expected to happen next week, will trigger another auction, with hedge fund manager Paul Marshall, Rupert Murdoch’s News UK, and National World among potential bidders.
RedBird IMI is also exploring joint venture options with Lord Rothermere’s Daily Mail General Trust (DMGT) among potential partners.
DMGT may require additional funding for an independent bid, amid heightened scrutiny of foreign state involvement in media acquisitions. Plans are underway to cap foreign state equity ownership in newspaper groups at around five per cent.
However, talks remain ongoing, and no agreements have been finalised at this stage, the Financial Times said.
RedBird IMI remains open to continued ownership if bids fall short of its investment threshold.
Both RedBird IMI and DMGT declined to comment.