Former Tory chancellor Zahawi plans £600m bid for Telegraph | Business News

Nadhim Zahawi, the former Conservative chancellor, is mounting a £600 million bid for The Daily Telegraph that could put an end to the auction of some of Britain’s most influential media assets.

Sky News has learned that Zahawi, who left parliament in May after opting not to run again for his seat of Stratford-on-Avon, approached a number of billionaire backers about help to finance a bid for the daily newspaper, its sister title of Sunday. and The Spectator magazine.

City sources said the Reuben family, who own a wide range of property assets and a stake in Newcastle United Football Club, were among those approached by Zahawi in recent weeks.

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The former Cabinet minister, who also served as the government’s business secretary, education secretary and vaccines minister during the Covid-19 pandemic, believes Telegraph has significant scope to increase its profitability by expanding in the US.

He is said to be leading talks on a bid for the Telegraph directly with International Media Investments (IMI), the Abu Dhabi-based vehicle that owns the majority of RedBird IMI, which bought an option to acquire the newspapers last year.

It was unclear on Monday whether Zahawi was participating in the sale process instigated by RedBird IMI through its banking advisers Raine Group and Robey Warshaw.

It is believed he has not yet submitted a formal bid, but is said to be confident of securing enough financial firepower to present a competitive offer.

The identity of Zahawi’s other possible supporters was unclear.

Zahawi declined to comment.

The former foreign minister has extensive business relationships in the Middle East, including in Abu Dhabi, where Sheikh Mansour bin Zayed Al Nahyan, deputy prime minister of the UAE and ultimate owner of Manchester City Football Club, has been influential in shaping his interest in the Telegraph.

RedBird IMI, led by former CNN chairman Jeff Zucker, stole a march on rival Telegraph bidders last year when it repaid a £1.16 billion loan owed by the Barclay family to Lloyds Banking Group, putting it in pole position to take control of the media. titles.

That plan was thwarted by the Conservative government’s decision to change media ownership laws to prevent a foreign state from exercising control over Britain’s national newspapers.

Zahawi played a key role last year as intermediary between the Barclay family and RedBird IMI, and his closeness to the Telegraph’s former owners was underlined in May when Sky News revealed he would be joining Very Group, the online retailer and provider of family financial services. , as its president.

He was appointed to chair the newspaper group if RedBird IMI was allowed to convert its call option into ownership of the securities.

This announcement came three months after IMI participated – together with private equity firm Carlyle – in a £125 million financial support package for Very Group.

The Barclay family is not thought to play a direct role in Mr Zahawi’s talks with IMI over the Telegraph.

Sources said the nature of Zahawi’s relationship with IMI meant he would be in a strong position to acquire the Telegraph if he could finalize the necessary financing for the deal.

The initial bidding deadline on Friday is believed to have seen a number of tentative bids for the titles of the Telegraph, The Spectator or both.

National World, the London-listed media group, and Lord Saatchi, the former advertising guru, are among those said to have submitted bids for the newspapers.

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Last week, Sky News reported that there was growing uncertainty over whether Sir Paul Marshall, the hedge fund tycoon and backer of GB News, would submit a bid for the Telegraph.

Daily Mail & General Trust, publisher of the Daily Mail, has ruled out a bid, raising questions about whether it will recoup the £600m it paid to acquire the call option.

The fate of the Telegraph, historically a staunch supporter of the Conservative Party, has been up in the air for more than a year after Lloyds took control of its parent companies after Barclays fell behind on debt payments.

The family had owned the Telegraph for almost 20 years, but saw several of its assets fall into financial difficulties.

RedBird IMI declined to comment on Zahawi’s interest in the Telegraph.