Daily Mail owner strikes £500mn deal for Telegraph

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Daily Mail owner DMGT has struck a £500mn deal to buy rival newspaper The Telegraph in a tie-up that would create one of the most powerful right-leaning media groups in Britain.

The agreed takeover comes barely a week after RedBird Capital, the US private equity group led by former Goldman Sachs banker Gerry Cardinale, abruptly halted its own attempt to buy the 170-year-old newspaper. 

RedBird, which had stepped in to buy the newspaper after an earlier deal with its Abu Dhabi partner collapsed, walked away last week after the UK government failed to give a clear timetable for the transaction to close successfully.

Lord Rothermere, who owns Daily Mail and General Trust, has long wanted to buy the Telegraph Media Group in a bid to bring together two of the UK’s leading rightwing newspapers. The group also owns the Metro and i newspapers. Rothermere’s interest in taking control of the Telegraph was first revealed by the Financial Times last week.

The deal has been struck at about £500mn, which would repay the money spent by the RedBird-fronted consortium on the newspaper. The parties have entered a period of exclusivity to finalise the terms of the transaction.

A merger of the Daily Mail and the Telegraph would redraw the traditional lines of Britain’s Fleet Street, creating one of the largest UK media groups and a dominant voice in rightwing politics at a time when the Reform party is growing in popularity against the leftwing Labour government. 

Any deal will face questions over competition and media plurality, given it would further consolidate ownership of Britain’s national newspapers under a single proprietor.

If approved, the merger would bring to an end one of the most protracted and difficult media sales in British history. Officials have already subjected the battle for the Telegraph to months of scrutiny, contributing to a two-year leadership vacuum at the title.

The hope among people close to the talks is that ministers will see value in ending the uncertainty and restoring stable ownership to one of the country’s most influential newspapers.

DMGT said in a statement on Saturday morning that it “believes that the proposed acquisition would give much-needed certainty and confidence to TMG’s employees”.

The merger will be scrutinised closely by the UK’s regulatory bodies, the Competition and Markets Authority (CMA) and Ofcom, with competition concerns likely over market share in circulation and advertising.

People close to the deal suggested that the Metro and i could be offered for sale to address some of these concerns.

DMGT said that it plans to invest in the newspaper group to accelerate its international expansion, particularly in the US.

Ministers will be under pressure to enforce media plurality, with the government able to step in to ensure a wide range of news sources and opinions in the newspaper market.

The prospect that the “Torygraph” — as it has been dubbed — could soon be in the hands of owners of its closest rival could also spark concern among members of the Labour party, which has been fiercely attacked by both titles since winning the election last year.

Former Sun editor David Yelland said on Saturday: “This deal is huge: the Rupert Murdoch era of dominance in the still-powerful UK newspaper market is over. This fuses two of the most potent, professional — though toxic and angry — news empires in the world.”

Rothermere had been one of the bidders in the original auction of the newspaper after Lloyds Banking Group seized control of the Telegraph in 2023 from the Barclay family.

DMGT had been in talks with a Qatari investment group in 2023, but people close to the deal say that no Middle Eastern cash would be involved in this transaction.

In a statement, DMGT said “the transaction would comply with the UK’s Foreign State Influence regime as there will be no foreign state investment or capital in the funding structure”.

UK politicians have changed the law so that only a 15 per cent stake can be taken by a sovereign wealth fund after worries emerged about RedBird’s partner, Abu Dhabi’s IMI, being too influential as an owner.

The deal would be a major coup for Lord Rothermere, the aristocratic owner and chair of DMGT, who inherited the position at the age of 30 on the death of his father in 1998. His great-grandfather, Harold Sidney Harmsworth, set up the Daily Mail in 1896.