One source said both titles were profitable and had delivered strong growth in recent months, meaning interest was expected to be robust. It is believed that some candidates will be interested in both newspaper and magazine, while others will bid on just one title.
RedBird IMI hopes to recoup the £600 million it paid last year. Previously, The Telegraph was valued at £510m and The Spectator at £90m. Advisors from Raine and Robey Warshaw, George Osborne’s investment bank, are overseeing the sale process.
A spokesman for the fund said: “This has been a thorough process involving discussions with interested parties from around the world, and it is no surprise that interest has remained extremely high.”
RedBird IMI’s takeover attempt was derailed earlier this year after ministers intervened to block the sale of British media assets to foreign states.
The private equity fund got three-quarters of its funding from United Arab Emirates vice-president Sheikh Mansour bin Zayed al-Nahyan, the owner of Manchester City, raising concerns about state influence over The Telegraph.
A spokesperson for RedBird IMI added: “RedBird IMI has today confirmed that it intends to withdraw from the proposed acquisition of Telegraph Media Group and proceed with the sale.
“Our ownership would have provided the strongest editorial protection ever for a British newspaper, along with much-needed investment. We continue to believe that this approach would have benefited The Telegraph and Spectator readers, their journalists and the wider British media landscape.
“Unfortunately, it is clear that this approach is no longer feasible. Our focus now is on providing certainty to the employees and readers of The Telegraph and The Spectator, and securing the best value for the assets, which remain highly attractive.”
RedBird IMI added that it had held “constructive discussions” with ministers to ensure a “smooth and orderly sale” of the titles.
The launch of the sale process comes days after The Telegraph revealed a £278 million black hole in its finances caused by former owners the Barclay family. The family obtained the money through loans during the ownership period, but the company says it is unlikely the amount will be recovered.
Investigators at HMRC and the National Crime Agency have been trying to trace the money through the Barclay family’s complex web of companies as part of an investigation into seven years of potentially irregular transactions.
The £278 million, which was flagged as a “provision” in the Telegraph’s latest accounts this week, pushed the company to a paper loss of £245 million last year.
That was despite a 5% increase in turnover to £268 million, while total subscriptions rose by more than 300,000 to more than a million. Underlying profit, excluding exceptional costs due to the ownership crisis, was £60m, up 28%.
The losses will have no impact on the sale process as The Telegraph’s assets will be moved to a new holding company as part of a so-called “hive down” process.
The Barclay family lost control of the Telegraph last year due to £1.2 billion in unpaid debts to Lloyds Banking Group. Lloyds planned to sell the title at auction, but this failed when RedBird IMI helped the family repay the debt in full, which involved converting around £600 million of the loan into property.
The Barclay family regained ownership but no control of The Telegraph after the deal was blocked. The newspaper has since been supervised by three independent directors.
A spokesperson for the Barclay family said: “Throughout the family’s ownership, the business has been managed responsibly and within all legal frameworks, with all accounts approved by accountants.”