Daily Mail owner pulls out of race to buy Telegraph blaming new Labour government

Daily Mail owner Lord Rothermere has pulled out of the bidding for The Telegraph citing concerns that the Labour government would object to the purchase.

The DMGT group run by Lord Rothermere, whose family founded the Daily Mail in 1896, has told advisors overseeing the sale of the Telegraph and Spectator magazine that it would not be making a bid.

They cited a change of government meant it would “face a heightened risk of a protracted regulatory process if we were to win the auction”.

A spokesman for DMGT said: “DMGT has decided against participating in the auction of the Telegraph Media Group (TMG).

“We believe the new statutory regime governing the ownership of UK newspapers is overly restrictive, and could curtail our ability to raise capital for our news publishing and other media businesses - both now and in the future.

“With a new government in place, we would face a heightened risk of a protracted regulatory process if we were to win the auction. This would cast further uncertainty over TMG and could disrupt our plan to grow DMGT’s diverse stable of news titles.

“We continue to believe that DMGT would be the optimal owner of The Telegraph thanks to our unrivalled heritage in news publishing.

“DMGT has the capital and resources to make The Telegraph a long-term global success, but we cannot justify the required investment given the changing legal and regulatory backdrop.”

The DMGT group own a number of publications including The Mail on Sunday, Metro, the I and the New Scientist.

Lord Rothermere’s group was widely regarded as the frontrunners to buy the broadsheet newspaper and its withdrawal comes following numerous financial and regulatory hurdles from the start.

Earlier this year, the Conservative government intervened to block Abu Dhabi-backed fund RedBird IMI from buying the newspaper group.

Last year, previous Telegraph owners the Barclay family were forced to put the media group up for sale in order to repay debts to lenders at Lloyds Bank.

After a lengthy process, receivers for Telegraph Media Group agreed to sell it to investment fund RedBird IMI.

The deal saw RedBird IMI pay roughly £600 million to purchase the business and agree to take on £600 million of related debts.

It is understood that a raft of parties have already informally registered their interest in buying the publications.

But currently there are no preferred suitors to snap them up.

GB News investor Paul Marshall is among those to have reportedly shown an interest in buying the titles.

Meanwhile, Rupert Murdoch’s News UK is also reportedly interested in purchasing The Spectator, but it is unlikely to be in the frame to buy The Telegraph titles due to competition concerns through his ownership of The Times.

First-round bids are expected this month, paving the way for a deal later in the summer.