DMGT confirms interest in Telegraph titles

Lord Rothermere's DMGT sees "possible synergies" in a deal
Lord Rothermere's DMGT sees "possible synergies" in a deal

Daily Mail owner DMGT has confirmed its potential interest in becoming the future owner of the Telegraph titles.

DMGT owns DMG Media, which publishes the Mail titles. Media sources said that chairman Lord Rothermere, who de-listed DMGT from the stock market and took the £974m turnover business private last year, has a long-standing desire to add the Telegraph titles to his portfolio.

Over the weekend Sky News reported that Rothermere was in talks with potential investors about backing for a takeover deal.

The newspapers have been put up for sale by Lloyds Banking Group, which has taken control of TMG’s offshore parent B. UK. Ltd and appointed receivers at the Bermuda company following a long-running dispute over loan repayments.

A DMGT spokesman said: “We have been engaged with many parties over the possible synergies between DMG Media and the Daily Telegraph and have registered our interest with Lloyds but we have no formal plans and there is no consortium.”

Sales at Telegraph Media Group rose 3.75% to £254.2m in the 52 weeks ending 1 January. Operating profit before exceptionals improved markedly, up 20.4% to £40.1m.

DMGT made no mention of the magazine brands that also form part of the up-for-sale assets: The Spectator, Apollo magazine and lifestyle publisher The Chelsea Magazine Company, acquired in March.

Last week the acquisitive National World media business said it was considering participating in the sale “as and when such a process formally commences”.

The sale is being helmed by tech veteran Mike McTighe.

At the end of last month Goldman Sachs International and Linklaters were appointed as advisers to the parent companies of the Telegraph and the magazine brands: Press Acquisitions and May Corporation.

Press Acquisitions and May Corporation stated: “At this initial stage, the boards and their advisers will assess the readiness of the two titles for a sale, including customary vendor due diligence.”

Billionaire Czech investor Daniel Křetínský, who co-owns more than 25% of Royal Mail’s parent group via Vesa Equity Investment, has also been flagged as a potential bidder.

The likely valuation is also the subject of much speculation. Sir Frederick Barclay and his late twin brother Sir David Barclay acquired TMG nearly 20 years ago in a £665m deal.

Since then, printed newspaper circulations have declined drastically, but TMG has made a profitable success of its subs model for online and print products.

By comparison, operating profits at £601.4m turnover Reach were down 10% at £71.3m in its latest results, and that group currently has a market capitalisation of £233.43m.