Former chancellor Zahawi mulling bid for the Telegraph

The former chancellor Nadhim Zahawi is interested in buying the Telegraph newspapers and Spectator Magazine.

Mr Zahawi, who stood down as a Conversative MP at the general election earlier this month, is thought to be seeking financial backing to fund a bid for the publications, according to a source familiar with the situation.

The Telegraph newspapers and Spectator magazine went back on sale earlier this year after an Abu Dhabi-backed bid for them collapsed.

The deal, which valued the publications at around £600m, would have transferred their ownership to the Gulf-backed Redbird IMI consortium, but the government intervened in January and legislation banning foreign states from owning UK newspapers followed.

According to Sky News, which first reported Mr Zahawi's interest in the publications, the former chancellor has sounded out a number of financial backers for a potential bid.

He is also said to be in talks with IMI, the Abu Dhabi based company that controls Redbird IMI and holds a large amount of debt in the two titles.

The BBC has approached Mr Zahawi for comment while IMI declined to comment.

The first stage of an auction for the Telegraph and Spectator ended last Friday and it’s understood up to 20 bidders expressed an interest in one or more of the papers, including some private equity groups, international investment houses and individual billionaires.

It’s understood the process will enter a second stage in the coming weeks.

Rupert Murdoch’s News UK and GB News owner Sir Paul Marshall are thought to be among the interested bidders.

But the owners of the Daily Mail, DMGT, pulled out of the auction last week, saying that the group would “face a heightened risk of a protracted regulatory process if we were to win the auction” following the election of a new Labour government.

The Telegraph and the Spectator magazine, both right leaning publications, were put up for sale last year when they were seized by Lloyds Banking Group from long-time owners the Barclay family, which had failed to pay back a loan of more than £1bn.

However, before an auction process could conclude, the Barclay family paid off their debt with money lent by Sheikh Mansour bin Zayed bin Sultan al-Nahyan, the owner of Manchester City football club and vice-president and deputy prime minister of the UAE.

In return, the Barclays agreed to transfer ownership of the newspapers to the Gulf-backed consortium.

A number of Conservative politicians and senior journalists at the titles had voiced serious concerns at the prospect of a sale to what they considered to be a foreign power and with the government intervention and new legislation, the bid stalled.

It’s thought Nadhim Zaharwi helped broker that deal, and is now keen to mount his own bid for the titles.