After two years of uncertainty, the ownership saga of the Telegraph has taken yet another twist.

After two years of uncertainty, the ownership saga of the Telegraph has taken yet another twist.

On May 15, the government announced a new law that will allow State-Owned Investors (SOIs), including sovereign wealth funds, public pension funds, and social security schemes, to hold up to a 15% stake in UK newspapers.

The move raises the threshold from the previous 5% cap proposed by the Conservative government before the last general election.

The policy shift comes in the wake of a controversial 2024 takeover bid for the Telegraph and Spectator by RedBird IMI, a US-based firm backed by the Abu Dhabi ruling family. That bid, worth £600 million and led by Sheikh Mansour bin Zayed Al Nahyan, best known in the UK for owning Manchester City FC, sparked backlash in Parliament and prompted the then-Conservative government to introduce a ban on foreign state ownership of British news media.

The move followed the dramatic seizure of the Telegraph and Spectator by Lloyds Bank in June 2023. The bank took control of the titles from the Barclay family in an effort to recover £1 billion in outstanding debt.

In response to the 2024 bid, Parliament passed the Digital Markets, Competition and Consumers Act, aimed at protecting UK media from foreign state influence.

But now, a 15% cap could allow Gerry Cardinale’s US private equity firm RedBird Capital to finalise a deal to buy the Daily and Sunday Telegraph and play a role in the newspapers’ future.

A post-consultation review found concern among newspaper groups that a ban was overly restrictive and harmful to their ability to raise capital. Major media proprietors, including Rupert Murdoch (owner of the Times and the Sun) and Lord Rothermere (owner of the Daily Mail), argued that a 5% cap would cut the industry off from deep-pocketed sovereign investors.

Culture secretary Lisa Nandy said the changes would protect “media plurality” while helping cash-strapped publishers “raise vital funding”.

In a statement, she said: “Britain’s free and independent press is a national asset like no other and it is right that we have strong measures in place to allow scrutiny of UK takeovers that might go against the public interest.

“We are fully upholding the need to safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding.

“We are taking a proportionate, balanced approach to a threshold for low-risk investments that will remove a potential chilling effect on press sustainability.”

But the decision has drawn criticism. Nils Pratley, financial editor at the Guardian, said Nandy is “naive if she thinks 15% will ensure “minimal risk” of foreign state influence.”

“That is not how the world works: 15% is a hefty foot in the door. A shareholder with a stake of that size will sometimes (and, in the case of listed companies, very often) be the largest on the register. The chair of an organisation cannot simply refuse to take the phone call,” he continued.

Pratley pointed to how at BP, a mere 5% investor, the US hedge fund Elliott Management, “plainly had a role in encouraging the board to perform strategic somersaults on green investment.”

“Yes, BP’s independent board ultimately took the decision itself. But Elliott, as we saw, tried to define expectations, set a mood and generally be influential,” he continued.

Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere pulled out of the bidding last summer amid concerns that he would be blocked on competition grounds.

The Spectator was sold last year for £100m to hedge fund billionaire Sir Paul Marshall,  who has made Lord Gove, the former cabinet minister, its editor.

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