Former UK Chancellor Nadhim Zahawi is reportedly assembling a £600m bid to buy the Telegraph titles and The Spectator.
The move comes a week after Daily Mail owner DMGT pulled out of the race. DMGT, which also owns the Metro and the i newspapers, feared a “protracted regulatory process” amid potential competition concerns if it won the auction and said this could affect its ability to grow its own existing business.
It also warned that a ban on foreign governments investing in UK newspaper titles passed by the last government had curbed its ability to raise capital. The law was rushed through in the wash-up process before the general election and turned out to be more restrictive than had been expected, banning foreign sovereign wealth funds and state pension funds from having any stake at all in a UK newspaper business.
Sky News reports that Zahawi, who left Parliament in May, has approached billionaire backers including the Reuben brothers.
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Questions remain over whether Sir Paul Marshall, the hedge fund tycoon and GB News backer, will submit a bid.
Private equity firm CVC is understood to be considering making a bid.
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The open auction process to buy The Telegraph and The Spectator magazine is restarting after a failed bid by the Jeff Zucker-led Redbird IMI, a joint investment vehicle between US private equity firm Redbird and Abu Dhabi-backed vehicle International Media Investments.
The deal, which saw Redbird IMI agree to pay off more than £1bn in debts for The Telegraph’s former owners the Barclays, was ultimately thwarted when the UK Government brought forward new legislation to ban foreign governments from owning UK newspapers and current affairs magazines amid criticism of the UAE investment. Redbird IMI are looking to recoup at least £600m from the sale of the Telegraph and Spectator (the value of Barclays debt secured against the titles).
Why is The Telegraph being sold?
In June last year Lloyds Banking Group effectively repossessed Telegraph Media Group and The Spectator over the Barclays’ outstanding debts. The value of The Telegraph was put at around £600m.
The formal sale process then began on Friday 20 October. It ended abruptly after Redbird IMI made its deal with the Barclays although the transaction was put on hold by competition inquiries ordered by then-Culture Secretary Lucy Frazer. It was then ultimately stymied altogether and Redbird IMI withdrew rather than continuing to fight.
The latest financial results for Telegraph Media Group have since been published: although it is profitable, with a 35% rise in operating profit in 2023, it saw a record £244.6m loss due to mystery loans apparently extracted by the Barclay family. Turnover was up 5% to £268m.
The latest results for The Spectator, for 2022, showed revenues up 2% to £20.8m with operating profit down 10% to £2.6m, attributed to investment in the US, Australia and sister fine art magazine Apollo.
Press Gazette will update the following story as bids are confirmed or discarded, or new information comes to light.
Any of the people or businesses mentioned could bid individually or jointly, or not at all.
Who still wants to buy The Telegraph and/or The Spectator?
Nadhim Zahawi
The former Conservative MP is reported by Sky News to be approaching billionaire backers with a view to assembling a £600m bid for the Telegraph titles and The Spectator.
CVC
Investment firm CVC Capital Partners is considering a bid for The Telegraph, the news outlet reported on 17 July.
If any bid was ultimately successful, The Telegraph would become the first UK national newspaper to be owned by a private equity firm.
Last time The Telegraph was up for sale in 2004 CVC teamed up with DMGT but they pulled out when the price went higher than they were willing to pay.
This time CVC is said to be interested alone. DMGT has separately said it is no longer interested in taking part.
CVC has investments in a range of industries, notably in the UK in Six Nations and Premiership Rugby, but in terms of media it has Authentic Brands Group, which owns the intellectual property for Sports Illustrated.
GB News investor Sir Paul Marshall
Sir Paul Marshall, the co-founder of hedge fund Marshall Wace, is believed to still be interested in buying The Telegraph.
Last year, amid the first auction process, Sir Paul was reported to be working with the investment bank Moelis on the potential bid and was holding discussions with US billionaire and hedge fund founder Ken Griffin, one of the world’s richest men, to potentially take part in a consortium.
Griffin is a donor to the Republican Party in the US – although he did not contribute to Donald Trump’s 2016 campaign – and any potential involvement in The Telegraph would be his first personal entry into a media business. It would be in a personal capacity and not through his hedge fund Citadel, the FT reported last year.
Sir Paul has been an investor in GB News in a personal capacity since before its launch in 2021. He has since renewed his investment, saying he was proud that the broadcaster is providing a space for “genuinely independent thinking, insightful discussion, and impartial analysis” but not “groupthink”.
Politically, he is known for donating to the Vote Leave campaign ahead of the 2016 Brexit referendum. The Telegraph also declared for Leave and, according to Press Gazette’s ‘Brexitometer’, was the third most biased national newspaper towards Brexit behind the Daily Express and Daily Mail.
Sir Paul is also a financial backer of Unherd, the news site set up by former Times columnist Tim Montgomerie in 2017 that says its aims are “to push back against the herd mentality with new and bold thinking, and to provide a platform for otherwise unheard ideas, people and places”.
Unherd says it is not aligned to any political party and its media pack shows a split among its audience of 34% right of centre, 29% centrist, and 21% left of centre.
David Montgomery’s National World
In March, National World chairman David Montgomery claimed the Yorkshire Post and Scotsman publisher, which has made a series of smaller specialist acquisitions in the past two years, was still the “best qualified” candidate to buy The Telegraph.
Former Local World/Trinity Mirror boss Montgomery re-entered the market at the start of 2021 when he bought the former JPI Media newspaper titles through new company National World Plc.
The company first confirmed its interest last August, telling investors: “National World notes media speculation that it is a possible participant in the sale process surrounding Telegraph Media Group and its associated titles.
“As the Company has previously announced, its growth strategy is rooted in actively exploring opportunities to build its business through acquisitions and implementing its new operating model for owned assets.
“The Board continues to evaluate accretive opportunities to grow the business and will consider participating in a sale process for Telegraph Media Group as and when such a process formally commences. There can be no certainty that an acquisition will take place nor as to the terms of such an acquisition.”
Sky News subsequently reported that Montgomery is “close to appointing Cavendish Capital Markets and Peel Hunt to help raise the financing” to buy both Telegraph titles. The firms would work alongside “Rothschild, which is providing corporate finance advice to Mr Montgomery, and Dowgate Securities, its existing broker”.
Then in March Montgomery said: “In the second half of 2023 National World competed in the aborted auction for The Telegraph. The conclusion of its ownership change is still in doubt but the opportunity was in line with both the founding principles of National World – that it would be a consolidator in the sector – and its ability to leverage both its infrastructure to extract significant synergies and its proven management expertise.
“Our view remains that National World remains the best qualified among the various candidates for such a deal both in terms of industry qualification and also editorial independence, as well as the absence of any competition issues.”
News Corp
Multiple reports last year claimed Rupert Murdoch wants to buy The Spectator, potentially to expand it further in the US where it first launched a dedicated offering in 2018 and where it could align with right-leaning News Corp brands like Fox News and the New York Post.
Murdoch stepped down as chairman of News Corporation in November.
But The Guardian spoke to a source with knowledge of the initial sale discussions who said: “People still think Murdoch is the frontrunner and can outbid everyone else. He’s got so much cash, it’s a trophy prize he’s always wanted. You can see it like the end of his career.”
Lord Saatchi and Lady Lynn Forester de Rothschild
Sky News first reported on 6 July that former Conservative co-chairman Lord Saatchi, responsible for some of the party’s major advertising campaigns, is considering a bid alongside Lady Lynn Forester de Rothschild, a former director of The Economist Group.
“City sources said they had approached a number of potential financial backers in recent weeks, although neither could be reached for comment, and people close to the process cautioned that it was far from certain that they would ultimately participate in an offer,” Mark Kleinman reported for Sky News.
Conrad Black
Martinson also reported that Conrad Black, who initially sold The Telegraph to the Barclays in 2004 for £665m, has been “approached about a potential bid”.
Who was interested in buying The Telegraph but has pulled out?
Lord Rothermere’s DMGT
The Times reported on 10 July that Lord Rothermere’s DMGT, which owns the Mail, Metro, i and New Scientist titles, had told bankers overseeing the sale that it had decided to pull out of the race.
A spokesman for Daily Mail and General Trust told The Times: “DMGT believes the new statutory regime governing the ownership of UK newspapers is overly restrictive, and could curtail our ability to raise capital for our news publishing and other media businesses — both now and in the future.
“With a new government in place, we would face a heightened risk of a protracted regulatory process if we were to win the auction. This would cast further uncertainty over the Telegraph and could disrupt our plan to grow DMGT’s diverse stable of news titles.”
DMGT first confirmed in August 2023 it was considering a bid for the Telegraph alongside investors – but later decided to go it alone.
It said the two potential benefits of a takeover were learning from The Telegraph’s subscriptions business and the potential of growing it in the US.
A spokesperson said last year: “The Rothermere family has a unique record as a custodian of newspapers, and since Lord Rothermere took DMGT private, its focus as a consumer news business puts it in an ideal position to provide the resources, management expertise and long-term decisions the Telegraph needs for its journalism to thrive.
“The Telegraph’s success in building a subscription model will help us reinforce the strength of our existing business.”
They added: “We do believe there is a strong potential to scale the Telegraph abroad, particularly in the US, just as we have very successfully done with the Mail.”
Rothermere took DMGT private at the end of 2021, with him and his family paying close to £1.6bn for the part of the company they did not already own.
DMGT initially held talks with Middle Eastern investors, though emphasising it would only do a deal if it kept economic and editorial control. But it later decided to pursue the bid alone.
In a rare interview with The Times, Rothermere explained why: “We went down the road of talking to people both in the Middle East and in the US. In the end I just thought to myself, ‘You know, it’s just too difficult.’
“If you’re in bed with a financial investor, their normal term time frame is three to five years, they want to know how they’re going to make more money over that period. I think a lot of the fruits are going to be born over a much longer period of time.”
Rothermere described The Telegraph as “a great brand, it also attracts great journalists. And after all, that’s what a news organisation is”, adding: “The Telegraph is one of the great newspapers of the world. It is impossible for me just to walk by.”
And he said existing parts of DMGT could learn from its subscriptions business: “I think we can carry on being mostly advertising, but we can also build a premium subscription product as well.”
The size of DMGT’s existing empire would likely have meant a challenge from the Competition and Markets Authority if it attempted to buy the Telegraph titles.
Press Gazette analysis last year showed that if DMGT bought The Daily Telegraph, it would control more than 50% of the daily national newspaper market in the UK.
A takeover of the Sunday Telegraph would take it to about 32% of the Sunday market - less than the 40% controlled by News UK incorporating The Sun on Sunday and The Sunday Times.
Rothermere told The Times: “I have faith that the CMA is going to look at this in a proper way and I don’t really want to front-run their answers or make them feel in any way that I’m trying to influence their judgment." But he emphasised the independence given to his editors at the Mail, i and Metro titles, saying: "Do I want to get involved? No I don’t. I genuinely don’t. It is not my remit." i editor Oly Duff told Press Gazette last month Rothermere was "known for letting editors edit".
Rothermere previously expressed an interest in buying The Telegraph in 2004 and said of that time: "It was a complex transaction. In the end the Barclays bought it and paid a higher price than I was willing to pay anyway."
Axel Springer
German publisher Axel Springer pulled out of the running in the initial auction, according to the FT on 17 November, after deciding it was not willing to pay the likely £600m price tag.
Axel Springer had registered its interest to buy The Telegraph titles with Goldman Sachs.
The publisher previously attempted to buy The Telegraph in the 2004 race that was ultimately won by the Barclays.
Axel Springer was founded by the publisher of the same name in 1946 with ambitions to create the biggest newspaper publisher in Europe. Its biggest German titles include Bild and Die Welt but it is now active in 40 countries and major acquisitions have included Insider in 2015 and Politico in 2021. It also created curated news app Upday as part of a strategic partnership with Samsung, on whose phones the app appears.
Ex-Telegraph editor William Lewis
Ex-Telegraph editor Sir William Lewis told Bloomberg in September he had lined up funding to take over his former employer.
He said in an interview: “I love the Telegraph. It’s a fantastic journalistic organisation. I would be really interested in trying to find a way to buy it. We have the support to do it," although he added that the title "needs a digital product and services refresh".
However in November he was appointed chief executive and publisher of The Washington Post, seemingly thwarting those plans.
Lewis did not share who had been involved or how much funding they had offered, saying only he had received "significant expressions of interest from a wide range of potential backers".
He added that he would not unilaterally reject Middle Eastern support, but that there are currently no Saudi Arabian business partners involved.
Lewis edited The Daily Telegraph between 2006 and 2009 and led a major period of its digital transformation.
He was until last year chief executive and co-founder of The News Movement, a social-led start-up focusing on reaching Gen Z audiences, alongside former BBC editorial director Kamal Ahmed who is editor-in-chief.
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