Lord Rothermere’s Daily Mail and General Trust (DMGT) is in exclusive talks to buy its rival, the Telegraph, in a deal that would create the most powerful right-leaning media group in Britain.
The deal has reportedly been struck for “about £500m”, which would repay what RedBird Capital, the newspaper’s previous suitor, had agreed as a price. Where exactly that money comes from is now the subject of intense speculation.
Analysts believe Rothermere will need to put together a consortium of investors, but hasn’t had the time. They say the period of exclusivity is a proactive move to prevent the triggering of an auction for the 170-year-old title.
“DMGT did struggle to raise £60m for a stake in the Telegraph when the Barclays still owned it, and it had to scrabble to find the £35m in cash,” said one analyst. “I think the final consortium will need to be 55% DMGT to satisfy the regulator and the Lords. That’s what the exclusivity period will be about.”
It’s no secret that Rothermere has long coveted the title. The Daily Mail has developed a significant presence in the US and Australia – areas that RedBird saw as targets for expansion for the Telegraph. But analysts questioned whether the move had “meaningful synergies”, given printing is already shared and the Mail has handled the Telegraph’s ad sales through its company Mail Metro Media since 2021.
The question for regulators and, ultimately, culture secretary Lisa Nandy, is how to judge the effects on competition in the newspaper market. Last year, the Daily Mail accounted for 18% of national daily print circulation, while the Telegraph had nearly 5%. It’s estimated the two newspaper groups would control about one-third of UK newspaper print advertising revenue.
“The only reason you drop normal regulatory concerns, like loss of plurality or market concentration, is if there is a ‘fire sale’ situation,” says an analyst. “The trouble with that is that in a fire sale, the price you are willing to pay goes down, not up.”
One structural remedy might be for DMGT to sell off its other assets, including the Metro and the i. But even then, there may be challenges from other quarters.
“The dog that hasn’t barked in this is News UK. You can bet that Rebekah [Brooks] et al will be lobbying the government hard not to let this happen,” adds the media source.
Photograph by Finnbarr Webster / WPA Pool via Getty Images