Daily Mail-owner Rothermere eyes minority Telegraph stake in RedBird deal
Sky News has learnt that Lord Rothermere, who controls Daily Mail & General Trust (DMGT), was in detailed negotiations late last week which would have seen him taking a 9.9% stake in the Telegraph titles.
It was unclear on Monday whether the talks were still live or whether they would result in a deal, with one adviser suggesting that the discussions may have faltered.
One insider said that if DMGT did acquire a stake in the Telegraph, the transaction would be used as a platform to explore the sharing of costs across the two companies.
They would, however, remain editorially independent.
Sources said that RedBird and IMI, whose joint venture owns a call option to convert debt secured against the Telegraph into equity, were hoping to announce a deal for the future ownership of the media group this week, potentially on Thursday.
However, the insider suggested that a transaction could yet be struck without any involvement from DMGT.
The progress in the talks to seal new ownership for the right-leaning titles comes days after the government said it would allow foreign state investors to hold stakes of up to 15% in British national newspapers.
That would pave the way for Abu Dhabi royal family-controlled IMI to own 15% of the Daily and Sunday Telegraph - a prospect which has sparked outrage from critics including the former Spectator editor Fraser Nelson.
The decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry.
RedBird Capital, the US-based fund, has already said it is exploring the possibility of taking full control of the Telegraph, while IMI would have - if the status quo had been maintained - been forced to relinquish any involvement in the right-leaning broadsheets.
Other than RedBird, a number of suitors for the Telegraph have expressed interest but struggled to raise the funding for a deal.
The most notable of these has been Dovid Efune, owner of The New York Sun, who has been trying for months to raise the £550m sought by RedBird IMI to recoup its outlay.
On Sunday, the Financial Times reported that Mr Efune has secured backing from Jeremy Hosking, the prominent City investor.
Another potential offer from Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, has failed to materialise.
RedBird IMI paid £600m in 2023 to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine.
That objective was thwarted by a change in media ownership laws - which banned any form of foreign state ownership - amid an outcry from parliamentarians.
The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.
The UAE-based IMI, which is controlled by the UAE's deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan, extended a further £600m to the Barclays to pay off a loan owed to Lloyds Banking Group, with the balance secured against other family-controlled assets.
Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding for control of his rival's titles last summer amid concerns that he would be blocked on competition grounds.
The Telegraph's ownership had been left in limbo by a decision taken by Lloyds Banking Group, the principal lender to the Barclay family, to force some of the newspapers' related corporate entities into a form of insolvency proceedings.
DMGT, RedBird and IMI all declined to comment.
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