Daily Mail owner agrees to buy Daily Telegraph for £500m

The publisher of the Daily Mail has agreed to buy the Daily and Sunday Telegraph for £500 million.

Daily Mail & General Trust (DMGT) said it has entered into discussions with Redbird IMI, a joint venture between UAE and US private equity firm Redbird Capital Partners.

Redbird Capital’s own bid for control of Telegraph collapsed last week.

The deal needs to be signed off by Culture Secretary Lisa Nandy. A spokesperson said Nandy would “review any new buyer acquiring the Telegraph in line with the public interest and foreign state influence media merger arrangements”.

DMGT and Redbird IMI have said they expect the deal to close “soon”.

DMGT chairman Lord Rothermere said he had “been a long-time admirer of the Daily Telegraph” and that the deal would give its staff “much-needed certainty and confidence”.

He said, “The Daily Telegraph is Britain’s largest and best-quality broadsheet newspaper and I have grown up respecting it. It has a remarkable history and has played a vital role in shaping Britain’s national debate for many decades.”

He said: “Chris Evans is an excellent editor and we intend to give him the resources to invest in the newsroom. Under our ownership, the Daily Telegraph will become a global brand, just as the Daily Mail has become.”

The purchase will see the Telegraph become part of DMGT’s portfolio of media organisations, which also includes the iPaper, Metro and New Scientist as well as the Daily Mail and Mail on Sunday papers.

The group said the Telegraph would remain editorially independent from DMGT’s other titles.

It said the case for approving the deal was “compelling” and that it would comply with UK rules, as there would be no foreign state investment or capital in the funding structure.

A spokesperson for Redbird IMI said: “DMGT and Redbird IMI have worked quickly to reach the agreement announced today, which will soon be submitted to the Secretary of State.”

Elsewhere, Liberal Democrat Lords business spokesman Chris Fox said: “A move towards a potential deal should certainly be considered to end the uncertainty affecting the future of the Telegraph.

“But, certainly as liberals, we are skeptical about concentrating so much agenda-setting power in the hands of so few people.”

He urged the competition regulator to “rigorously scrutinize” the terms of the agreement to “ensure that we do not leave an even more imbalanced media market for consumers and competitors”.

RedBird Capital pulled out of the deal to buy Telegraph last week.

Previous attempts to buy the group were scuttled by politicians, as it was majority-funded by Abu Dhabi’s IMI Group – which is owned by the Abu Dhabi royal family.

A change in law meant that foreign sovereign wealth funds could take a maximum of 15% stake in newspapers or magazines.

Its recent bid complied with that rule, but it was understood the government wanted to submit the deal for regulatory review.

Sources close to Redbird stressed that they were confident the bid would pass the government review process, but they cited negative articles towards the bid from the existing Telegraph newsroom as a factor in reducing their interest.

Redbird founder Gerry Cardinale planned to expand Telegraph’s reach and customer base in the US, believing there was a gap in the market.

Among other investments, Redbird owns Italian football team AC Milan.

The Telegraph has been in limbo for more than two years, with the Redbird IMI consortium paying off the debts of the Telegraph’s previous owners, the Barclay family, hoping to take ultimate ownership of the newspapers.