Billionaire Blavatnik Courted to Take Daily Telegraph Stake
In a move that could potentially shake up the UK media landscape, billionaire investor Sir Len Blavatnik is being courted to take a stake in The Daily Telegraph, according to sources close to the situation. The news comes as the newspaper’s new American majority-owners, RedBird Capital Partners, seek to bolster their investment in the title.
Sky News has learnt that Sir Len, whose holding company Access Entertainment owns assets in Britain, including the Theatre Royal Haymarket, has been approached by RedBird Capital about becoming a minority investor in the Telegraph titles. Two sources close to the situation confirmed that Sir Len was being sounded out about a deal, although they cautioned that no agreement had been struck and it remained unclear whether one would be.
As reported by Sky News, Sir Len is a prolific investor in the arts, media and entertainment industries. His portfolio of investments includes DAZN, the sports-streaming service, which is now also backed by a Saudi sports group. He also owns mobile games studio Tripledot and Scenario Two, a theatre production company. Sir Len was knighted by the late Queen Elizabeth II for services to philanthropy in 2017.
RedBird Capital Partners announced its agreement to acquire Telegraph Media Group last month for an enterprise valuation of £500m. At the time, the company said it was “in discussions with select UK-based minority investors with print media expertise and strong commitment to upholding the editorial values of the Telegraph”. This was principally a reference to Lord Rothermere, the Daily Mail proprietor, who remains in talks to pay more than £30m for a stake in the Mail’s rival right-leaning newspaper group.
According to insiders, Goldman Sachs is advising DMGT on the investment, with a deal the subject of ongoing discussions. The Abu Dhabi state-backed vehicle IMI is still expected to acquire the maximum 15% stake in the Telegraph permitted under proposed new media ownership rules. The government’s decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry.
However, the deal faces continued opposition from parliamentarians, with The Guardian reporting on Thursday that a cross-party group had written to Lisa Nandy, the culture secretary, warning of “potential Chinese state influence” because of links between RedBird Capital chair John Thornton and China’s sovereign wealth fund. This suggestion has been dismissed by RedBird Capital insiders.
It is understood that Ukraine-born Sir Len’s potential investment in the Telegraph is being explored as part of a broader effort to strengthen the newspaper’s financial position. Dovid Efune, the owner of The New York Sun, is meanwhile continuing to assemble a rival bid for the Telegraph, having secured backing from Jeremy Hosking, the prominent City investor. His prospects, however, look to have diminished after the former chancellor, Nadhim Zahawi, was reported to have withdrawn from his so-called ‘British bid’.
The Telegraph titles’ parent company was forced into insolvency proceedings two years ago by Lloyds Banking Group, which ran out of patience with the Barclay family, their long-standing owner. RedBird IMI, a joint venture between the two firms, paid £600m several months later to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine.
That objective was thwarted by a change in media ownership laws, which banned any form of foreign state ownership. Some parliamentarians are continuing to argue that a 15% threshold would be too high, and that the proposed rules are ambiguous because they potentially allow for more than one state investor to aggregate their holdings in British newspapers.
As previously reported by Sky News, The Spectator was sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor. RedBird Capital Partners declined to comment on the potential investment in the Telegraph, while a call to Access Industries’ London office went unanswered.
This development is likely to be seen as a significant move in the UK media landscape, with Sir Len Blavatnik’s potential investment in the Telegraph set to be closely watched by industry insiders and politicians alike. As the newspaper industry continues to navigate a challenging financial landscape, the Telegraph’s future ownership structure is likely to remain a subject of intense interest.
The news was first reported by Sky News, which has been at the forefront of coverage of the Telegraph’s financial situation and potential changes in ownership. The story has been widely covered, with many industry experts and commentators weighing in on the potential implications of Sir Len’s investment.
Sources:
https://news.sky.com/story/billionaire-blavatnik-courted-to-take-daily-telegraph-stake-13382627
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