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A consortium led by Dovid Efune and Axel Springer is willing to sweeten its bid for Telegraph Media Group, escalating efforts to upend an agreed £500mn sale of the business to DMGT, said people familiar with the matter.
Efune, publisher of the New York Sun, has sent a new letter in recent days to RedBird, which is overseeing the Telegraph sale process, offering to improve financial terms and urging the private equity group to engage in serious discussions.
The consortium — which includes UK hedge fund manager Jeremy Hosking and US broadcasting multimillionaire David Smith — informed RedBird that it had the capacity and willingness to increase the cash portion of its offer, people briefed on the matter said.
Efune and his consortium partners also stated their bid had greater certainty of completion than DMGT, which already owns a number of newspapers in the UK including the Daily Mail.
The consortium’s latest move comes after it submitted an offer in recent weeks with the support of Axel Springer, owner of Politico and Business Insider in the US and Bild and Die Welt in Germany, thereby adding a heavyweight international publisher to Efune’s bid.
DMGT, led by Lord Rothermere, has offered £400mn in cash upfront for the Telegraph and a further £100mn over two years.
Efune’s consortium was offering more cash upfront than DMGT and had signalled it could pay more in the letter to RedBird if the group seriously engaged with it, people familiar with the situation said.
RedBird had been reluctant to engage substantively because it wanted to honour its agreed deal with DMGT, other people briefed on the process said. The group led by Gerry Cardinale had long tried to sell the Telegraph and was keen not to derail those plans, they added.
Efune’s consortium hopes its willingness to sweeten its bid will push RedBird to reconsider and explore a proposal that could offer greater value.
Hosking had pledged about $100mn to Efune’s consortium and Smith — who owns the Baltimore Sun — had made a smaller contribution, people with knowledge of the matter said.
The consortium has also attracted support from a wealthy British investor, although their identity could not be determined.
UK culture secretary Lisa Nandy recently referred the proposed sale of the Telegraph to DMGT to the Competition and Markets Authority and media regulator Ofcom for review.
In a letter published last month outlining her provisional decision, Nandy noted DMGT controlled more than half of the daily national print newspaper market in the UK and about 36 per cent of the right-leaning daily print segment.
She warned the number of owners serving the UK’s right-leaning daily and Sunday national newspaper market would fall from four to three if the deal proceeded.
Regulators have until June to deliver their findings, extending by up to four months a sale process that has dragged on for three years and left the Telegraph without a permanent owner.
The appearance of a competing bid may offer some comfort to RedBird, which has been compelled to relinquish control of the Telegraph.
RedBird’s attempt to secure ownership of the Telegraph encountered repeated obstacles, including UK political opposition linked to the financial backing it initially received from Abu Dhabi.
RedBird and the Efune consortium declined to comment.