By Sam Tabahriti and Amy-Jo Crowley

LONDON (Reuters) -RedBird Capital Partners on Friday formally requested approval from the British government to proceed with its proposed acquisition of The Telegraph, according to an internal memo seen by Reuters and confirmed by the U.S.-based investment firm.

If approved, RedBird would take sole control of the broadsheet under a deal that values it at 500 million pounds ($667.50 million), with Abu Dhabi-backed IMI participating as a minority investor. IMI’s stake will be capped at 15%, in line with UK legislation on foreign state-backed stakes.

Ownership of the Telegraph, a conservative-leaning newspaper, has been in flux since IMI initially acquired the newspaper and The Spectator magazine in 2023. The deal was later disrupted when the then government moved to ban foreign state investment in British newspapers, forcing a sale.

“This is an important step forward in the process as we look to end the uncertainty at the Telegraph,” RedBird said in its internal statement.

“Our conviction in the potential of the Telegraph has never wavered, despite the tremendous challenges all journalism endeavours face in the wake of artificial intelligence, social media news consumption and the ongoing technological disintermediation that threatens all intellectual property based businesses.”

The Department of Culture, Media and Sport confirmed it had received RedBird’s request but did not comment any further.

A Public Interest Intervention Notice was issued in January 2024 when RedBird Capital and IMI initially sought joint control. The current government’s decision to allow foreign state-owned investors to own up to 15% of UK newspaper publishers helped unlock the revised deal.

The move followed an outcry among some politicians over the independence of the media and whether foreign states would be able to buy political influence.

RedBird, founded in 2014, manages about $12 billion in assets globally. Its investments include AC Milan, Skydance Media and a pending merger with Paramount Global.

($1 = 0.7491 pounds)

(Reporting by Sam Tabahriti and Amy-Jo Crowley; Editing by Kirsten Donovan)