Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, have stepped up talks about a joint bid for The Daily Telegraph which could bring an end to nearly two years of uncertainty about the newspaper’s ownership.
Sky News has learnt that Mr Boehly’s investment vehicle Eldridge Media Holdings and Mr Montgomery, the former Mirror newspapers boss, are in discussions about a deal that would involve combining the Telegraph titles and National World, the London-listed company founded by Mr Montgomery.
The talks remain tentative and are not certain to result in a formal offer for the Telegraph.
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Mr Boehly is said to have instructed bankers at Deutsche Numis to advise him on his interest in the newspapers.
He was reported to have met Mr Montgomery to discuss the Telegraph situation in January, although there has been little sign of any progress since then.
In a statement confirming Sky News’ report, National World said on Friday morning that it noted “recent speculation relating to an approach for the company from Eldridge Media Holdings, LLC”.
“The Company has received confirmation that EMH is considering making a proposal to acquire the entire issued and to be issued share capital the company but to date no details of any such proposal has been received by the National World board (including as to its possible terms, timing or process for implementation).”
Sources close to the process said the Boehly-Montgomery consortium was in talks with third-party backers about financing their Telegraph offer, but that any bid was likely to be below the £500m level at which the Abu Dhabi-based vehicle RedBird IMI would recoup its investment in an option to buy the Telegraph.
Mr Boehly and Mr Montgomery are not yet in exclusive talks with RedBird IMI’s advisers, the sources added.
Dovid Efune, the New York Sun publisher who had several weeks of exclusivity to clinch a deal before his financing arrangements fell apart, remains interested in a potential deal, they said.
Sky News revealed last November that the former Conservative chancellor Nadhim Zahawi and the party’s former treasurer, Sir Mohamed Mansour, had been enlisted by Mr Efune to aid his bid for the right-leaning newspapers.
Other bidders are also continuing to monitor the situation, although it is unclear whether they continue to include Mr Zahawi.
If Mr Boehly and Mr Montgomery do progress to a formal and binding offer, a central tenet of the deal’s economic rationale would involve the extraction of synergies from a combination of The Scotsman’s publisher, National World, and the right-leaning Telegraph titles.
One complicating factor lies in the fact that National World is already the subject of a recommended takeover bid from Media Concierge, an entity controlled by National World shareholder Malcolm Denmark.
That offer is awaiting court and regulatory approval, and Mr Montgomery is said by allies to be confident of formulating a more attractive counterbid.
If he cannot do so, a formal offer involving him for the Telegraph titles is a more remote prospect, according to banking sources.
RedBird IMI paid £600m 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 amid an outcry from parliamentarians.
The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Michael Gove, the former cabinet minister, as its editor.
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The UAE-based IMI, which is controlled by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan, extended a further £600m to the Barclays to pay off a loan owed to Lloyds Banking Group, with the balance secured against other family assets.
Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding last summer amid concerns that he would be blocked on competition grounds.
The Telegraph auction is being run by Raine Group and Robey Warshaw.
