Daily Mail Drops Cinven As Partner For Telegraph Bid
The Daily Mail & General Trust’s bid to take control of the Telegraph titles has been thrown into doubt following a split with private equity house Cinven, leaving the newspaper group to search for another partner before the impending deadline for completed bids.
The relationship between DMGT and Cinven is believed to have broken down over terms insisted upon by the equity house. Under the agreement Cinven would have acted as an insurance partner to DMGT’s bid, with the Telegraph titles automatically falling into their hands should the Government or competition regulators demand DMGT sell the newspapers.
It has been reported that Cinven demanded a multimillion pound fee from DMGT to secure its part in the deal, in a move that ultimately led to the break up of the partnership between the two heavyweights.
The development leaves DMGT with two options if it is to continue its bid for the Telegraph titles. It must either find another backer before the 20 May deadline, or continue with a solo bid, running the risk of intervention by competition watchdogs.
Reports in today’s Independent suggest the company is likely to continue with a solo bid for the newspaper, believing that it has a ‘strong case’ to put before any intervening regulator. There is also scope for the company’s bid to be widened outside the Telegraph titles, should a new backer with wider interests come forward. The company has stated it is willing to negotiate a much larger purchase than that which would have been undertaken with Cinven.
The bidding war surrounding the Telegraph titles, as well as the other assets of Hollinger International, looks to be finally grinding towards a conclusion, with the deadline for ‘full and final’ bids looming large on the horizon.
Earlier this year some of the most high profile bidders for Hollinger’s assets dropped out of the race, with Richard Desmond’s Express Newspapers Group making a shock departure, as well as American publishing giant and owner of the Newsquest group of newspapers, Gannett (see Gannett Pulls Out Of Race For Telegraph Titles).
It is believed that around 11 parties will table final bids for the Telegraph by 20 May, including DMGT and the Barclay brothers. A number of venture capitalists and private equity firms are also expected to submit bids. The Telegraph titles alone are expected to fetch £600 million, although this could easily rise as the heated bidding process reaches its final stage.
The latest ABC results for the six months to March 2004 reveal less than impressive news for both the Daily and Sunday Telegraph, which saw their circulation decline by 3.7% and 6.7% respectively in year on year analysis.
Telegraph Group: 020 7538 5000 www.telegraph.co.uk
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