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Lord Rothermere’s Daily Mail and General Trust has held talks with Qatari backers to support a combined bid for Telegraph Media Group, the latest example of bidders for the UK national newspaper scouring the oil-rich Gulf for financial backing.
DMGT, which owns the Daily Mail and Metro newspapers, is in discussions over additional equity to finance a bid for the rival media group that could cost more than £500mn, according to two people familiar with the situation.
Lloyds Banking Group, which is owed more than £1bn in debt, seized control of Telegraph Media Group from the Barclay family in June to recover as much money as possible through a sale. Since then, media executives and rival groups have held talks with investors from the Gulf about providing funds for the acquisition of the right-leaning broadsheet.
Sean Walsh, a DMGT spokesperson, said: “Over the past few years we have been approached and have had talks with a number of Middle Eastern investors who have shown an interest in participating in a bid for the Daily Telegraph.”
He added: “To date we do not have a formal relationship with any investors; however, if we did, we would only do so if we have the majority of economic and equity risk, and the control needed to invest in the business and protect its editorial independence.”
Abu Dhabi’s RedBird IMI has also held talks about supporting a bid for the Telegraph, according to a person familiar with the matter. RedBird declined to comment.
The Barclay family had also sounded out UAE-based investors to back their bid to buy back the Telegraph, said another person.
The family is making repeated offers to buy back the newspaper seized from them, with a latest bid to Lloyds at more than £600mn, according to two people familiar with the offers. This has raised alarm among rival bidders. The Barclay family declined to comment on their latest offer.
The lender has also begun to speak to the Barclay family about the future of the Very Group, their multibillion-pound financial services and retail group, whose holding companies have a guarantee linked to the Telegraph debt, the FT previously reported.
Sir William Lewis, former editor-in-chief of the Telegraph, is preparing to bring together a consortium to table an offer, which could include money from the Middle East.
The newspaper could fetch more than £500mn in an auction being overseen by Goldman Sachs that is expected to start in the next few weeks.
The UK’s media industry is already part-owned by investors from the region, with a Saudi investor owning a stake in London’s Evening Standard and the Independent newspapers.
Potential bidders for the Telegraph believe that the UK government would be comfortable with further media ownership from the Gulf, pointing to ownership of British football clubs and the expected meeting between Prime Minister Rishi Sunak and Mohammed bin Salman, the Saudi crown prince.
DMGT said in its last set of results that it would seek to reduce its net debt over time, with analysts saying that any sizeable offer from the group would probably need additional equity from other investors.
DMGT could face regulatory issues, including competition objections given its strength in advertising in print newspapers. One option would be to at least sell some of its smaller titles, a person said.
There may also be concerns over ownership, with the combination of the Mail and the Telegraph both powerful parts of the right-leaning press in the UK.
Dozens of parties have registered interest in the sale, according to those familiar with the process, ahead of the start of the formal auction expected in the next few weeks.
National World, a local newspaper publisher founded by media executive David Montgomery, has confirmed that it is looking at a potential offer for the newspaper.
Rupert Murdoch’s News UK has registered its interest, according to people close to the group. Sir Paul Marshall, the Brexit-supporting hedge fund millionaire, is also linked with a bid. In addition, Daniel Kretinsky, the billionaire Czech investor, is considering an offer.
Additional reporting by Samer Al-Atrush and James Fontanella-Khan in New York