Deal-hungry Křetínský adds the UK’s Telegraph to his shopping list

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Czech billionaire Daniel Křetínský has entered the auction to acquire the UK’s Telegraph Media Group, joining bidders including Daily Mail and General Trust, people close to the process said. 

Křetínský, a lawyer-turned-energy tycoon who has been on a dealmaking spree across Europe, signed a non-disclosure agreement in recent days to join the auction process for the parent company of The Daily Telegraph, Sunday Telegraph and The Spectator magazine.

However, in a wide-ranging interview last month with the Financial Times, Křetínský said that he would not pay outsized prices for “trophy” media assets.

While declining to comment specifically on Telegraph Media Group, the 48-year-old said: “We normally invest in media that is in need of some sort of support . . . It is not in our DNA to fight for trophies.”

The FT previously revealed that Křetínský wrote to the then owners of Telegraph Media Group in late 2020, expressing interest in making an offer for the UK publisher. He later abandoned the idea.

In June, Lloyds Banking Group seized control of the group from Britain’s Barclay family, which bought the company for £665mn in 2004, in an attempt to recover some of the more than £1bn in debt the bank is owed. 

An auction led by Goldman Sachs, which could fetch more than £500mn, is set to begin in the coming weeks. While Křetínský is unlikely to seek control of the group, he may support other offers and end up with a minority stake, the people with knowledge of the process said.

Other bidders include Lord Rothermere’s DMGT, publisher of the conservative tabloid the Daily Mail, and NationalWorld, a local newspaper publisher founded by media executive David Montgomery. 

Křetínský’s holding company, EP Group, has emerged as one of Europe’s most active dealmakers in recent years using record profits from its coal, power and gas businesses to build stakes in well-known but unloved media, retail and infrastructure in the UK, France and Germany. 

The most significant transactions, which include a recent agreement to bail out heavily indebted French food retailer Casino and plans to purchase Atos’s loss-making IT services unit, will diversify his business significantly.

Křetínský told the FT that the common thread behind these deals was that they are all investments in businesses that provide services that are essential to modern life and often have a large asset base.

“Our role is to deliver . . . in an efficient way by properly managing the cost, being disciplined, being obsessed with the numbers, being obsessed with understanding where value is created and avoid situations where it is lost.”

He added: “When we talk about our investing philosophy, it is also probably fair to mention that we effectively like to invest in companies that are not indebted.”

In media, Křetínský has used a series of deals in France to burnish his credentials and break into the establishment outside central and eastern Europe. His media transactions are typically executed via Czech Media Invest, which is part-owned by his longtime partner and collaborator Patrik Tkáč, a Slovak businessman. 

CMI’s portfolio includes a roughly 17 per cent stake in France’s Le Monde, according to Křetínský.

This year, CMI agreed to carve out Editis, which is behind a group of magazines including the French edition of women’s magazine Elle, from Vivendi’s purchase of Lagardère. Křetínský’s investments also include a 5 per cent stake in French commercial television group TF1.

“I have to say that commercially what we have in the press is not too relevant to the overall group, but we are very proud . . . the social responsibility is very important and I’m very satisfied with the investment,” he said.

In the UK, Křetínský has bought 25 per cent of Royal Mail, 10 per cent of supermarket chain J Sainsbury and 27 per cent of football club West Ham United. 

While he has ruled out a full bid for the club, Křetínský told the FT he may increase his stake in West Ham. “In some situations, for instance in media or sport, you don’t necessarily need to always go for a majority position.”

He added: “If you talk about assets with a very strong emotional connotation, you really need to think twice or three or four times whether the overall equation gives you the right to nominate yourself into the position of the majority owner just by money.”

Křetínský explained that, despite the batch of recent transactions, his team continued to hunt for assets. “We still have some capacity to do some more, but it’s not unlimited. For instance, our retail team has the capability to probably do one more [deal].”

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