DMGT narrow favourite to buy Telegraph as the bidding ends

The Barclay brothers and venture capitalist 3i were widely thought to be trailing DMGT’s reported bid of £690m going into the final stages of the auction, although the media and exhibitions giant is sure to face the scrutiny of regulators if it is successful.

Weekend reports suggested that some senior figures in the Labour Party were staunchly opposed to a deal that would give DMGT control of around 25% of the national newspaper market.

Although the operations would almost certainly not be merged, a DMGT acquisition would park the nation’s bestselling broadsheet, The Daily Telegraph, and its Sunday sister title alongside Associated Newspapers’ Daily Mail, The Mail on Sunday, the Evening Standard and Metro.

Ofcom and the Office of Fair Trading could also be expected to take a close interest if the auction goes DMGT’s way.

However, if recent talks between DMGT and CVC Capital Partners lead to a joint bid, the private equity firm could help to sidestep regulatory issues by taking a majority stake in the Telegraph titles.

Lord Rothermere’s family firm made a timely case for its own financial health last week with a set of half-year interim results that revealed a 29% increase in pre-tax profits to £83.4m.

Group revenue for the six months to 4 April rose by 9% to £1.047bn compared with the equivalent period of last year, while Associated’s profits rose from £14.4m to £50.2m on revenues of £455m.

Ad revenues at the loss-making Evening Standard climbed by 11% and classified revenues at the Daily Mail and The Mail on Sunday rose by 3.7%.

Regional publishing division Northcliffe boosted profits by 9% to £46.6m on the back of an increase in turnover of 9% to £257m.