Guardian Media Group (GMG) and its parent, the Scott Trust, have agreed in principle to sell The Observer to Tortoise Media.
The sale will “protect The Observer‘s future, championing the voice of liberal values and investing in exceptional journalism while building its digital offering,” GMG said in a statement.
Under the deal, the Scott Trust will also invest in Tortoise and become one of its biggest shareholders.
The Scott Trust will sit on the Tortoise board, chaired by Matthew Barzun, the former US ambassador to the UK under Barack Obama, as well as the editorial board, chaired by former Financial Times editor Sir Richard Lambert.
Tortoise, for its part, has committed to keeping the world’s oldest Sunday newspaper in print, and The Guardian reports staff have been told there will be no job losses as a result of the deal.
Tortoise has additionally committed to investing £25m into The Observer with an aim to develop it’s digital brand.
The deal is expected to be signed in the coming days.
Long-term view taken by leadership
It is understood that there were no other substantial bids for The Observer — only two approaches through lawyers that lacked substantial details. Meanwhile, Ecotricity founder Dale Vince was only interested in the acquisition if the current talks with Tortoise had fallen through.
Ole Jacob Sunde, chair of the Scott Trust, said: “We knew we needed the right combination of resources and commitment to build a new platform for The Observer. It required an ally to be sufficiently funded, long-term in nature and respect editorial independence and liberal values.
“I believe we have found this in Tortoise Media. We are looking forward to being part of the next phase in The Observer’s journey.”
Anna Bateson, CEO of GMG, added: “This investment will preserve The Observer‘s 233-year legacy and protect the paper’s future, ensuring it can continue producing exceptional liberal journalism, online and in print, for years to come.
“Underpinning it all will be a continued commitment to promoting a free press and maintaining editorial independence.
“The deal also supports the long-term success of The Guardian, building on our growth globally and across digital, as we continue to put readers at the heart of our outstanding journalism.”
Deal reached following strike action
Staff at The Guardian and The Observer took part in a two-day strike this week over the proposed sale.
In a statement, Katharine Viner, editor-in-chief of Guardian News and Media, said she recognised “how unsettling this period has been for Observer staff” but suggested that the sale is the “best possible way forward”.
Earlier this week, The Guardian communicated it would offer an “enhanced” voluntary redundancy scheme to Observer staff who do not want to join Tortoise and said remaining staff would keep their job titles, salaries and benefits post-sale.
GMG confirmed it was in talks to sell The Observer to Tortoise in September as it announced its 2023/24 financial results.
At the time, The Media Leader columnist Raymond Snoddy suggested that a sale made sense because “while The Observer is a venerable brand with similar liberal values to its parent, it is The Guardian that is the primary brand”.
Tortoise was founded by James Harding, former BBC News director and editor of The Times, in 2019. The company said it is backed by “a range of financial investors”, including Thomson Reuters chairman David Thomson.
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