The owner of the Daily Mail has secured funding for a £500m takeover of the Telegraph, in a crucial development that paves the way for the group to announce the terms of its acquisition on Monday.
Lord Rothermere’s Daily Mail and General Trust (DMGT) has agreed to pay the sum in two instalments, according to weekend reports. An initial payment of £400m will be funded by an increase in the group’s debt with its longstanding lender NatWest and existing company cash.
The group will pay RedBird IMI a further £100m within two years, most likely using a DMGT bond with Deutsche Bank that matures in 2027, according to the Observer.
Details of the financing structure will be given this week to the culture secretary, Lisa Nandy, as part of information she will need before allowing the deal to proceed.
Regulators including the Competition and Markets Authority and Ofcom will also have to review the offer.
The consortium RedBird IMI – a joint-venture between the US private equity firm RedBird Capital Partners and the United Arab Emirate’s International Media Investments – took control of the Telegraph in 2023. However, it was forced to put the newspaper group up for sale in April last year after the UK government legislated against foreign state ownership of British newspaper assets.
Rothermere has long-coveted control of the Telegraph titles. If successful, they will join a stable of newspapers and magazines that includes Metro, the i Paper and New Scientist. DMGT already handles the advertising contract for the Telegraph titles.
As part of the offer, which was initially floated last month, DMGT has said that the Mail and Telegraph editorial teams will remain separate and editorially independent, with investment provided to pursue the titles’ goal of becoming a global brand.
Rothermere’s group has said the deal would also give “much-needed certainty” to Telegraph staff, who have been stuck in limbo over a sale process that has dragged on for more than two years.
However, rival bidders are still circling. Dovid Efune, the owner of the New York Sun, is considering a bid and has the secured backing of the Baltimore Sun owner, David Smith, according to the Financial Times. Efune has secured about £100m in investment backing from the Brexit-supporting businessman Jeremy Hosking, it said.
Efune, who was born in the UK, had been in talks to buy the Telegraph last year, but was reportedly derailed by funding problems.
