Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, have intensified discussions regarding a joint bid for The Daily Telegraph. This move could potentially resolve almost two years of uncertainty surrounding the newspaper’s ownership. Sky News has been informed that Mr. Boehly’s investment vehicle, Eldridge Media Holdings, and Mr. Montgomery, the former Mirror newspapers boss, are exploring a deal that would entail merging the Telegraph titles with National World, a London-listed company established by Mr. Montgomery.
While the talks are still preliminary and not guaranteed to lead to a formal offer for the Telegraph, Mr. Boehly has reportedly engaged bankers at Deutsche Numis to assist him with his interest in the newspapers. Although a meeting between Mr. Boehly and Mr. Montgomery took place in January to discuss the Telegraph situation, progress has been minimal since then. In response to Sky News’ report, National World stated on Friday morning that they were aware of recent speculation regarding a potential approach from Eldridge Media Holdings, LLC.
Sources familiar with the negotiations indicated that the consortium of Boehly and Montgomery is discussing potential funding for their Telegraph bid with third-party supporters. However, any offer is expected to fall below the £500m threshold at which the Abu Dhabi-based entity RedBird IMI would recover its investment in an option to acquire the Telegraph. At present, Mr. Boehly and Mr. Montgomery have not entered into exclusive talks with RedBird IMI’s advisors.
Dovid Efune, the New York Sun publisher, who previously had a period of exclusivity to finalize a deal before facing financing setbacks, remains interested in a potential agreement. It was also revealed by Sky News in November that former Conservative chancellor Nadhim Zahawi and ex-treasurer Sir Mohamed Mansour were enlisted by Mr. Efune to support his bid for the right-leaning newspapers. Other bidders are monitoring the situation, although it is uncertain if Mr. Zahawi remains among them.
If Mr. Boehly and Mr. Montgomery proceed with a formal and binding offer, the deal’s economic rationale would involve capitalizing on synergies from a merger of National World, publisher of The Scotsman, and the right-leaning Telegraph titles. However, a complicating factor arises from National World already being the target of a recommended takeover bid from Media Concierge, controlled by shareholder Malcolm Denmark. This bid is pending court and regulatory approval, with Mr. Montgomery reportedly optimistic about formulating a more appealing counteroffer.
Should Mr. Montgomery fail to do so, the likelihood of a formal offer involving him for the Telegraph titles diminishes, according to banking sources. RedBird IMI had paid £600m for a call option intended to lead to ownership of the Telegraph newspapers and The Spectator magazine. However, this goal was derailed due to changes in media ownership laws following objections from parliamentarians. Subsequently, The Spectator was sold last year to hedge fund billionaire Sir Paul Marshall for £100m, with former cabinet minister Michael Gove appointed as its editor.
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The UAE-based IMI, controlled by Sheikh Mansour bin Zayed Al Nahyan, extended an additional £600m to Barclays to settle a loan owed to Lloyds Banking Group, with the remaining balance secured against other family assets. Previous bidders for the Telegraph included Lord Saatchi, offering £350m, and Lord Rothermere, the Daily Mail proprietor, who withdrew from the bidding last summer due to competition concerns. The ongoing Telegraph auction is being managed by Raine Group and Robey Warshaw.
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