The Daily Mail and General Trust has confirmed its interest with Lloyds Banking Group for a potential bid for The Telegraph.
Sky News first reported on Saturday that that Lord Rothermere, chairman of both DMGT and its consumer division DMG media, has held discussions with financial investors, including funds based in the Middle East, to support a bid for its rival newsbrand publisher.
However, while it has been engaging with several parties, the owner of the Daily Mail does not yet have any formal plans and there is no consortium, a spokesperson said.
Telegraph Media Group, whose publishing stable also includes the Spectator magazine, already outsources print advertising sales to DMGT’s advertising arm.
An acquistion would likely prompt an investigation by the Competition & Markets Authority, given that each group’s combined share of the UK newspaper advertising market would be about 35%.
The financing of the deal does not appear to be straightforward either. A deal is expected to value the media assets at about £600m, meaning about £400m of debts would remain outstanding even if the entire proceeds of any sale were used to repay the loan. The Telegraph was put up for sale in June after the Barclay family lost control after owing £1bn of unpaid debts to Bank of Scotland, part of Lloyds.
Goldman Sachs will run the auction for Lloyds for the group next month, with regional publisher National World (formerly Johnston Press), declaring an interest last week.
Last month Telegraph Media Group reported 4% revenue growth to £254.4m in the year ended December 2022, driven by improvement in digital subscriptions. The group also grew its profits by 32% in 2022 to £39m.
In a statement this weekend, a DMGT spokesperson 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.”