A Wall Street billionaire who had been lined up to bankroll a takeover of The Telegraph has decided not to invest, raising fresh doubts over its chances of success.
Leon Black, the co-founder of the $700bn (£573.2bn) private equity giant Apollo Global Management, had been in talks to become the keystone investor in a consortium attempting to take control for more than $500m. It is understood the deal under discussion would have made him The Telegraph’s biggest shareholder.
The advisers to the sellers, the Abu Dhabi-backed fund RedBird IMI, had hoped to secure the billionaire’s involvement as soon as this week. However on Tuesday night, a source close to Mr Black told The Telegraph that he and his family had decided not to invest.
The source said: “This isn’t happening.”
Mr Black is just the latest potential backer to walk away from a bid which is being spearheaded by Dovid Efune, the publisher of The New York Sun, a low-profile news website.
Mr Black, 73, is in talks to provide keystone funding to a group led by The New York Sun publisher Dovid Efune (pictured) – Sean Zanni/Patrick McMullan
Mr Black’s decision marks another blow to efforts by RedBird IMI to extract itself from its own doomed takeover attempt with its finances intact. Its bid was blocked last year by a ban on foreign state ownership, which was hurried into legislation following an outcry over press freedom.
Mr Efune emerged from an auction in October as the leading bidder with an offer that was comfortably higher than any rival. It was also the only offer that gave RedBird IMI any prospect of making back the price they paid for The Telegraph in their own complex debt deal with previous owners the Barclay family.
It subsequently emerged that, despite being granted exclusive rights to acquire The Telegraph, Mr Efune did not have funding in place. The months since have seen a succession of investors linked with the deal only to quickly walk away after apparently baulking at the price.
Mr Black, with an estimated fortune of $15bn and a recently opened investment office in Abu Dhabi is just the latest, although perhaps the most controversial.
Mr Black’s 30-year career at Apollo ended in scandal in 2021, when his longstanding personal and business ties with Jeffrey Epstein were exposed.
Mr Black’s 30-year career at Apollo ended when his long personal and business relationship with Epstein was exposed – New York State Division of Criminal Justice Services/REUTERS
He paid the paedophile an extraordinary $158m for financial advice and continued the relationship after Epstein was jailed in 2008 following a child sex trafficking investigation in Florida, even as other clients cut ties. Mr Black has said he “deeply regrets” the relationship.
His exit from Apollo unleashed a wave of allegations of sexual misconduct, which he has always denied. In 2023, he paid a $62.5m cash settlement to the US Virgin Islands to be released from any potential claims arising from investigations of sex trafficking on Epstein’s private island. There was no admission of liability.
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Two women’s claims against him have been abandoned or dismissed, but a third is heading for federal court in New York this year. An autistic woman with a rare form of Down’s syndrome, identified only as Jane Doe, alleges that Mr Black raped her at Epstein’s Manhattan town house in 2002, when she was 16.
His lawyers have called the lawsuit “frivolous and sanctionable” but have failed in an attempt to dismiss it. The case is scheduled for a management conference on Thursday.
Involvement in a bid for The Telegraph would have been likely to draw renewed official scrutiny to these matters, although the moral standing of prospective newspaper owners has not often concerned regulators.
Only an attempted acquisition of the Bristol Post by David Sullivan, the chairman of West Ham United and former pornographer, has been turned down by the Government as against the public interest, in 1990.
Since then a specific “fit and proper” test has been abandoned in favour of Ofcom assessments of the effect a takeover might have on free expression of opinion or the accurate presentation of news. This proved no barrier to the takeover of the Express titles by Richard Desmond, the former publisher of Asian Babes and Readers’ Wives magazines.
Nevertheless, The Telegraph’s independent directors have expressed private concerns about Mr Black’s regulatory prospects and the likelihood of further uncertainty as a result.
They have overseen the company through the 20 months of ownership limbo since Lloyds Banking Group lost patience with the Barclay family over their £1.2bn of overdue debts.
Led by chairman Mike McTighe, under the orders used to block RedBird IMI’s takeover they effectively report to Lisa Nandy, the Culture Secretary, and must ask permission from the Government to make crucial financial and personnel decisions.
Lisa Nandy, the Culture Secretary, has a quasi-judicial role in the sale of The Telegraph – Wiktor Szymanowicz/Anadolu via Getty Images
The extraordinary situation and the narrowing prospects for a resolution that will satisfy RedBird IMI and its backers in the UAE royal family led last week to voices across the political spectrum demanding action from Ms Nandy to bring the paralysis to an end.
She has made no comment on the sale of The Telegraph, in which she has a quasi-judicial role. Any intervention runs the risk of further damage to relations with the UAE, which was angered that its bid was blocked.
However in one scenario, she could direct the independent directors to sell the company to an acceptable buyer, probably at a price that would crystallise a loss for RedBird IMI. Bidders who offered less include the advertising grandee Lord Saatchi and his partner Lynn Forester de Rothschild, although their bid was rejected in the first round of the auction.
In his other role as chairman of The Algemeiner Journal, a newspaper mostly read by Hasidic Jews, Mr Efune was on Tuesday night hosting a Manhattan gala in honour of the pro-Israel commentator Douglas Murray.
The last public comment from his consortium came in late November and said there was “strong momentum” behind the takeover with “dozens of funding parties involved in these discussions”.
A spokesman for Mr Black declined to comment.