LONDON (Reuters) -RedBird Capital Partners, the U.S. fund that bought Britain's Telegraph newspaper in partnership with UAE-owned IMI, will take control of the publication after agreeing a deal that values the enterprise at 500 million pounds ($673 million). 

The ownership of the right-leaning broadsheet has been in flux after the Abu Dhabi-backed RedBird IMI bought the Telegraph and the Spectator magazine in 2023, before Britain's then government moved to ban foreign state investment in British newspapers, forcing it to sell.

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.

The current government's decision last week to allow foreign state-owned investors to own up to 15% of British newspaper publishers helped unlock a deal.

RedBird Capital, which provided a quarter of RedBird IMI’s funding for the initial deal, will become the sole control owner and is in talks with "select UK-based minority investors with print media expertise", it said in a statement.

IMI will participate as a minority investor subject to Britain's legislation on foreign state-backed ownership.

"We believe the UK is a great place to invest, and this acquisition is an important part of RedBird's growing portfolio of media and entertainment companies in the UK," Gerry Cardinale, the founder of the U.S. private equity firm, said in a statement.

The Telegraph said no final agreements were in place and there would be regulatory hurdles to clear.

RedBird Capital Partners was formed in 2014 and is investing in sports, media and financial services companies. It manages about $12 billion in assets globally, according to its website.

RedBird’s investments include AC Milan, Skydance Media and its pending merger with Paramount Global.

($1 = 0.7431 pounds)

(Reporting by Kate Holton and Catarina Demony; editing by William James and Tomasz Janowski)