London: Daily Mail owner DMGT says it has struck a £500mil or about US$650mil 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 deal announced last Saturday comes a week after US-based private investment firm RedBird Capital Partners withdrew its bid for The Telegraph, one of Britain’s biggest newspapers.
A RedBird-IMI joint venture had acquired the Telegraph Media Group and The Spectator magazine in 2023, only for the then government to intervene and ban foreign state investment in British newspapers. RedBird then sought to request approval from the government to proceed with the acquisition under a revised structure, with Abu Dhabi-backed IMI participating as a minority investor capped at 15%.
A source close to RedBird told Reuters that the regulatory clearance process had been slower than expected, contributing to doubts about the timeline and feasibility of the acquisition.
Sustained internal opposition from senior figures within the Telegraph newsroom had prompted it to walk away.
The Financial Times, which first reported the DMGT deal, said the price had been set at about £500mil to repay the money spent by the RedBird-fronted consortium.
The parties have entered a period of exclusivity to finalise the terms of the transaction and to prepare the necessary regulatory submissions, which they expect to happen quickly, DMGT said in a statement.
The transaction would comply with Britain’s Foreign State Influence regime as there will be no foreign state investment or capital in the funding structure, the statement added.
DMGT had registered an interest in potentially bidding for The Telegraph Media Group in 2023.
A spokesperson for RedBird IMI said: “DMGT and RedBird IMI have worked swiftly to reach the agreement announced today, which will shortly be submitted to the Secretary of State.” — Reuters
