RedBird considers support for Dovid Efune’s Telegraph bid

RedBird IMI is considering providing financial support for a sale of The Telegraph newspapers to a New York entrepreneur as he struggles to secure backing for a bid.
Dovid Efune has for weeks been in exclusive talks with RedBird IMI to buy The Daily Telegraph and The Sunday Telegraph but he has been unable to secure backing for a deal from Hudson Bay Capital and Oaktree Capital.
RedBird IMI, a joint venture backed by funding from the United Arab Emirates and the US, is selling the newspapers after its plan to secure the media outlets was blocked by ministers. Politicians pushed back against RedBird IMI because the lion’s share of its funding has been provided by Sheikh Mansour bin Zayed bin Sultan al-Nahyan, vice-president and deputy prime minister of the UAE, prompting concerns about a foreign power gaining control of a UK newspaper.
Ministers introduced new laws banning foreign governments from buying UK media outlets, effectively forcing RedBird IMI to run a new auction of the assets to recoup an investment of £600 million. RedBird IMI has hired bankers at Raine and Robey Warshaw to drum up interest for the newspapers.
RedBird IMI has previously said that its joint venture partner RedBird Capital would be willing to remain invested in the newspapers in some form in an onward sale. Yet more recent suggestions of its continued involvement has prompted questions about whether the UAE would remain linked to the publications. It is understood that support from RedBird Capital’s funds has not been ruled out but that funding from the UAE portion of the joint venture would not be possible.
Efune, the British-born owner of The New York Sun newspaper, emerged as a frontrunner in the auction for the Telegraph in September after he hired LionTree, a boutique investment bank, to advise on a bid but bidders are now preparing to re-enter the race as his campaign appears to falter.
A spokesman for Efune previously said that the entrepreneur had “high confidence” in his ability to secure financing and was in talks with “a number of reputable institutions” about a debt package. However, the future of The Telegraph remains uncertain even as executives seek to draw up budgets for the year ahead.
Rival bidders for the Telegraph could include DMGT, National World and Lord Saatchi, the 78-year-old former advertising executive who was rebuffed with an offer of £350 million.
RedBird IMI and Efune declined to comment.