The British owner of the New York Sun has said his £550m offer to buy the Daily and Sunday Telegraph is still on track, despite a big potential backer not joining the bid.
Dovid Efune entered exclusive talks to buy the Telegraph titles last month after submitting the highest bid in the second round of the auction for the titles.
Manchester-born Efune has until the end of this month to navigate the due diligence process to prove that he has successfully secured the funding to back his offer.
He has been working with LionTree, the boutique investment bank, as an advisor to help secure financial backers to clinch the deal.
Backers that have been approached include the asset manager Oaktree, the family office of the US hedge fund manager Michael Leffell, the former Conservative treasurer Sir Mohamed Mansour, Ashcroft Partners and the Koch family.
However, on Wednesday it emerged that Oaktree will not be a partner, sparking speculation that the bid may fall apart, resulting in a third auction of the titles. Efune’s spokesperson insisted, however, that he has “high confidence” he will secure the necessary financing, and that Oaktree did not offer a sufficiently competitive deal compared with other interested backers.
“Their proposal was not competitive, so we have decided not to proceed with them,” said Michael Crittenden, a spokesperson from the communications firm The Levinson Group. “We are progressing on debt financing with a number of reputable institutions and have high confidence in our financing path.”
Other potential suitors, meanwhile, are gearing up to re-enter another potential auction for the titles. One source said that there has been a “lack of activity” on due diligence, which had led them to believe that the process was not moving forward at a rate expected of a deal of such scale.
National World, the UK-listed company that owns regional titles including the Yorkshire Post and the Scotsman, also submitted a second-round bid and remains interested if the Efune deal falls through.
In July, Lord Rothermere, the owner of the Daily Mail, pulled out of the auction owing to fears that his newspaper group would be pulled into a long and complex battle to allow any takeover to overcome competition and political hurdles. However, Rothermere’s DMGT has always been interested in potential ownership of the Telegraph, and could renew its interest, with a divestment of national newspaper the i an option to appease regulatory concerns.
RedBird IMI – the consortium backed by Sheikh Mansour bin Zayed al-Nahyan, the vice-president of the United Arab Emirates and the owner of Manchester City football club and the US investment firm RedBird Capital Partners – paid £600m to take control of Telegraph Media Group in November last year from the Barclay family. However, the deal was referred to UK regulators over press freedom and competition concerns.
RedBird IMI was forced to put the Spectator and Telegraph titles back up for sale in the spring after the British government published legislation to block foreign states or associated individuals from owning newspaper assets in the UK.
In September, Sir Paul Marshall, the backer of GB News, acquired the Spectator for £100m but did not go on to also submit a bid for the Telegraph and Sunday Telegraph.
