Saatchi turns Telegraph page after £350m bid rejected | Business News

Lord Saatchi, the former advertising tycoon, accused the would-be owners of The Daily Telegraph of paying too much for the right to own the title after their £350m bid was rejected.

Sky News has learned that an indicative bid from Lord Saatchi and Lady Lynn Forester de Rothschild, former director of The Economist Group, did not make it through to the second round of an auction by the right-wing newspaper.

Sources said they were informed of the decision in recent days by the Raine Group and Robey Warshaw, the bankers handling the Telegraph auction on behalf of RedBird IMI, an Abu Dhabi state-backed vehicle.

RedBird IMI’s attempt to grab the titles of the Telegraph and The Spectator was thwarted by the last Conservative government’s decision to change media law to prevent foreign states from exerting influence over national newspapers.

Last week, Sky News revealed that Sir Paul Marshall, the hedge fund tycoon, had pioneered the acquisition of The Spectator, one of Britain’s most influential political magazines.

Lord Saatchi and Lady de Rothschild, who were advised by Lazard, are said to have structured their bid for the Telegraph and Spectator to include contingent payments based on the future performance of the business.

In a statement issued to Sky News, Lord Saatchi and Lady de Rothschild said: “We regret that Redbird IMI overpaid the Telegraph by £600 million.

“We are offering £350 million, plus additional payments depending on performance.

“Our offer is not the biggest, but it is the best.

“Whatever happens, this important national asset should end up in good hands in the long term.”

Their comment drew a scathing response from RedBird IMI, to which a spokesperson said: “They never signed an NDA [non-disclosure agreement]. They never made a serious offer.

“And they were not invited to the second round.

“So, with all due respect, no one takes Maurice or his views on any of this seriously.”

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The elimination of Lord Saatchi’s bid after the initial bidding phase leaves several other parties in the running to buy the Telegraph.

National World, the London-listed vehicle led by industry veteran David Montgomery, has expressed serious interest in bidding, while Sky News revealed last month that Nadhim Zahawi, the former chancellor, was raising supporters to finance a bid.

RedBird, a US-based investor that is part of the group that acquired the option to buy Telegraph last year, could also play a role as a future investor in the assets.

However, Sir Paul’s talks to buy The Spectator have intensified doubts that he will also try to buy the newspaper’s titles.

Lord Rothermere, the owner of the Daily Mailit withdrew from the bid in early summer amid concerns it would be blocked on competition grounds.

The fate of the Telegraph, historically a staunch supporter of the Conservative Party, has been up in the air for more than a year.

Lloyds Banking Group, the UK’s biggest high street lender, took control of its parent companies after the Barclay family fell behind on debt payments.

The family had owned the Telegraph for almost 20 years, but saw several of its assets face financial problems.

Barclays continues to control Lots of Groupthe online retailer, with IMI also extending financing to this business.

O Lloyds the debt, which totaled more than £1.15 billion, was paid by RedBird IMI on behalf of the family.

RedBird IMI is majority-owned by IMI, which is controlled by the Deputy Prime Minister of the UAE and ultimate owner of Manchester City Football ClubSheikh Mansour bin Zayed Al Nahyan.

The submission of a £350m bid for the group will raise questions about whether RedBird IMI can hope to recoup the £600m it paid to acquire the call option.

People close to the process insisted on Thursday, however, that there remained a “robust” interest in the Telegraph at prices significantly higher than those put forward by Lord Saatchi and Lady de Rothschild.