One source said that both titles were profitable and had delivered strong growth in recent months, meaning interest was expected to be robust. Some suitors are believed to be interested in both the newspaper and magazine, while others will bid for just one title.
RedBird IMI is hoping to recoup the £600m it paid last year. It has previously valued The Telegraph at £510m and The Spectator at £90m. Advisers at Raine and Robey Warshaw, George Osborne’s boutique investment bank, are overseeing the sale process.
A spokesman for the fund said: “This has been a thorough process which involved speaking to interested parties from around the globe, and it is no surprise that interest has remained extremely strong.”
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 took three-quarters of its funding from United Arab Emirates vice-president Sheikh Mansour bin Zayed al-Nahyan, the owner of Manchester City, leading to concerns about state influence over The Telegraph.
A RedBird IMI spokesman added: “RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale.
“Our ownership would have seen the strongest editorial protections ever put forward for a UK newspaper, along with much needed investment. We continue to believe this approach would have benefited The Telegraph and Spectator’s readers, their journalists and the UK media landscape more widely.
“Regrettably, it is clear 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 best value for the assets, which remain highly attractive.”
RedBird IMI added that it had held “constructive conversations” 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 £278m black hole in its finances caused by previous owners the Barclay family. The family extracted the money through loans over the course of its ownership, but the company has said the sum is unlikely to be recovered.
Investigators at HMRC and the National Crime Agency have been attempting to trace the money through the Barclay family’s complex web of companies as part of a review of seven years of potentially irregular transactions.
The £278m, marked as a “provision” in the Telegraph’s latest accounts this week, pushed the company to a paper loss of £245m last year.
That was despite a 5pc increase in turnover to £268m as total subscriptions rose by more than 300,000 to more than one million. Underlying earnings, excluding exceptional costs triggered by the ownership crisis, were £60m, up 28pc.
The losses will not have an impact on the sale process as The Telegraph’s assets are set to 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 over £1.2bn in unpaid debts to Lloyds Banking Group. Lloyds planned to sell the title through an auction, but this was derailed when RedBird IMI helped the family repay the debt in full, with roughly £600m of the lending to be converted into ownership.
The Barclay family regained ownership but not control of The Telegraph after the deal was blocked. The newspaper has since been overseen by three independent directors.
A spokesman 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 auditors.”