DMGT ‘exits’ Telegraph auction — but expect acquisition hunt to continue
Lord Rothermere, owner of the Daily Mail, has pulled out of the race to buy The Daily Telegraph over fears that the newspaper group would be drawn into a long and complex competition inquiry.
The Times has reported that Daily Mail General Trust, publisher of the Mail and MailOnline, will no longer take part in an auction to buy the Telegraph news brand and The Spectator magazine. The auction is due to take place on 19 July.
Other bidders include Sir Paul Marshall, the libertarian backer of GB News, and Lord (Maurice) Saatchi, the former Conservative party co-chairman whose ad agency, Saatchi & Saatchi, became well-known for memorable right-wing advertising campaigns.
Conrad Black, the former Telegraph owner who sold the title to the Barclay brothers, is also thought to be considering a potential bid, The Guardian reported on Thursday.
The Telegraph‘s current owner, Abu Dhabi-backed investment vehicle RedBird IMI, kicked off the auction for the titles. The UK government blocked RedBird from owning the newspaper because that would mean the Telegraph, a major UK national news brand, would be ultimately owned by a foreign state.
DGMT told The Media Leader: ““DMGT has decided against participating in the auction of Telegraph Media Group (TMG). We believe the new statutory regime governing the ownership of UK newspapers is overly restrictive and could curtail our ability to raise capital for our news publishing and other media businesses — both now and in the future.
“With a new government in place, we would face a heightened risk of a protracted regulatory process if we were to win the auction. This would cast further uncertainty over TMG and could disrupt our plan to grow DMGT’s diverse stable of news titles.
“We continue to believe that DMGT would be the optimal owner of the Telegraph, thanks to our unrivalled heritage in news publishing. DMGT has the capital and resources to make the Telegraph a long-term global success, but we cannot justify the required investment given the changing legal and regulatory backdrop.”
Analysis: Where now for Rothermere?
When Lord Rothermere won his battle to take DGMT private in late 2021, speculation was rife that taking the Mail owner away from the exposure of public markets would ultimately bring about a bid to buy the Telegraph.
Such a deal would have been opportunistic — it has come about after the Telegraph was seized by Lloyds Bank, having run up debts under the Barclays’ ownership.
And yet the prospect of that deal enabled Rothermere to explore financing options that may still bear fruit elsewhere. Rothermere was reportedly courting money from the Middle East last year to finance a consortium bid for the Telegraph.
Since appointing Paul Zwillenberg as CEO in 2016, Rothermere has sought to focus DMGT’s digital future on developing MailOnline, having offloaded a mishmash of subsidiaries that included Zoopla, education group Hobsons and insurance-risk business RMS.
After moving to delist the business, during which time Rothermere himself became CEO, he promoted US CEO Rich Caccappolo to run the entire publishing operation, having been successful in turning MailOnline into a leading global news brand with a healthy US audience.
Last month, the Mail announced the latest in a series of moves to produce more content in video and audio.
But a larger footprint is no longer a key differentiator. UK news brands are increasingly looking to international markets and that requires even more content to serve audiences across many platforms.
MailOnline now finds itself competing for US eyeballs with a growing number of UK players that have set up shop in New York, such as News UK (The Sun), Reach (The Mirror) and The Independent, not to mention The Guardian, which has been in the US since 2011.
So, while a “dream team” merger of UK news brands is off the table, there is every indication that Rothermere will remain on the acquisition hunt for high-profile content businesses.