FSG partner RedBird Capital pulls plug on £500m deal

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RedBird Capital Partners, an 11% minority shareholder in Fenway Sports Group (FSG), has unexpectedly withdrawn from a £500 million deal to acquire a major British media asset. The private equity firm, which is known for its involvement in sports and media industries as well as its partial ownership of Liverpool FC through FSG, had been lined up to lead a consortium for the takeover.

The deal involved the acquisition of a historic British newspaper that has been on the market for over two years following financial difficulties faced by its previous owners. RedBird had arranged financing alongside US giant Apollo, securing crucial debt backing for the purchase. However, the deal faced regulatory hurdles, including potential investigations by the UK competition watchdog and media regulator Ofcom.

Earlier attempts by RedBird to acquire the publication were blocked due to political and public concerns over foreign ownership. Consequently, the firm had restructured the consortium to include significant minority investors such as Lord Rothermere’s DMGT and billionaire Sir Leonard Blavatnik to meet regulatory requirements.

Despite the complex reorganization and financial readiness, RedBird’s recent decision to pull out highlights the challenges and uncertainties surrounding high-profile media acquisitions in the UK. This withdrawal raises questions about the firm’s future investment strategy, especially given its growing financial influence within both global media and sports sectors, as well as its ongoing minority stake in Fenway Sports Group.

The cancellation of the £500 million deal underlines the increasing complexities in acquiring British media institutions amidst regulatory scrutiny and geopolitical sensitivities, showing that even well-capitalized firms like RedBird must navigate carefully through these obstacles.