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The World's Largest Investment Group in Talks to Finance Telegraph Takeover

2024-11-26

In a significant development, one of the world's largest investment groups, Apollo Global Management with assets worth $733bn, is engaged in initial talks with Dovid Efune and his advisers regarding financing a £550m takeover of The Daily Telegraph by the owner of The New York Sun. Recent banking sources have indicated that these discussions are preliminary and may not necessarily lead to an agreement. Additionally, other debt providers are also in discussions with Mr. Efune. This comes just three days before an exclusivity period for the US-based businessman expires, and insiders suggest it is highly likely to be extended. Apollo holds a prominent position among the world's biggest financial institutions and is a major player in both private equity and private credit globally. In the last fortnight, a series of media reports have cast doubt on Mr. Efune's ability to complete the deal, with potential lenders like Oaktree Capital Management and Hudson Bay Capital withdrawing from the process.

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Sky News revealed in early November that the former Conservative chancellor Nadhim Zahawi and the party's former treasurer, Sir Mohamed Mansour, had been enlisted by Mr. Efune to assist his bid for the right-leaning newspapers. If the deal goes ahead, Mr. Zahawi, who is tipped for a peerage in Rishi Sunak's resignation honours list, and Sir Mohamed are expected to invest tens of millions of pounds. In September, Sky News disclosed that Sir Mohamed had been approached to provide up to £150m to a standalone bid for the Telegraph titles that were being led by Mr. Zahawi at the time. If completed, the transaction could crystallize an unlikely profit for RedBird IMI, the Abu Dhabi-backed vehicle that paid £600m for a call option intended to convert into ownership of the Telegraph newspapers and The Spectator magazine. Depending on the final deal structuring, it could be worth up to £575m, with less than a third expected to be in the form of debt. The Spectator was recently sold for £100m to Sir Paul Marshall, the hedge fund billionaire, who appointed Michael Gove as its editor. Insiders suggest that if Mr. Efune's bid is successful, Mr. Zahawi is likely to be given an ongoing role at the Telegraph. The former chancellor, education secretary and vaccines minister has been involved in the Telegraph process in various capacities, initially brokering a deal with RedBird IMI before assembling his own offer. He has close connections to many of the Gulf-based figures involved, including Sultan Ahmed al Jaber, the chairman of the bidding vehicle. Mr. Zahawi has also been named chairman of Very Group, the online retailer owned by the Barclay family that controlled the Telegraph for two decades and is now partly funded by IMI. The UAE-based IMI, 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. Mr. Efune's bid has raised the extraordinary possibility of a return to the British newspaper group for Conrad Black, its former proprietor, as reported by Sky News earlier in the autumn. Other bidders for the Telegraph included National World, headed by former Mirror newspapers chief David Montgomery, and Lord Saatchi, the former advertising mogul, who offered £350m. Lord Rothermere, the Daily Mail proprietor, withdrew from the bidding earlier in the summer due to concerns about competition grounds. The Telegraph auction is being managed by Raine Group and Robey Warshaw, the advisers to the Abu Dhabi-backed entity that was thwarted in its attempt to buy the media titles due to a change in ownership law. Apollo declined to comment.

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