The American investment firm RedBird Capital has walked away from its £500 million plan to buy the Daily Telegraph and Sunday Telegraph. The move startled many across media and finance circles, especially since the financing framework for the deal was largely in place.

According to people close to the talks, concerns over heavy regulatory review and restrictions on overseas ownership likely tipped the decision.

RedBird’s earlier bid ran into trouble when officials questioned its financial links to Abu Dhabi’s IMI group, controlled by the emirate’s royal family. Once lawmakers pushed through a rule capping foreign sovereign wealth funds at a 15% stake in UK newspapers, the firm revised its proposal to fit the new limits.

Despite that adjustment, people close to the talks say the government still intended to launch a full regulatory probe, leaving the entire deal on uncertain ground.

Instagram | @smashibusiness | Sheikh Mansour’s IMI group faces growing scrutiny as RedBird Capital retreats from the Telegraph takeover amid political pressure.

Reports suggest RedBird also encountered questions about its financial backing from China and Gulf-based investors. Because of these complexities, the firm chose to withdraw before any formal review began.

The Daily Telegraph remains in a state of uncertainty. For over two years, the publication has awaited stable ownership since RedBird IMI paid off debts tied to the Barclay family. As negotiations collapse again, the search for a new buyer continues, shaping another chapter in the newspaper’s turbulent history.