Sources say German group may struggle to recoup its investment as titles shift to less profitable models
Axel Springer did not complete due diligence on the Telegraph before sealing its £575m takeover, with sources saying the German media company could struggle to recoup its eye-watering investment as the titles shift toward less-profitable digital subscribers.
To wrap up the deal quickly, Mathias Döpfner, the chief executive of Axel Springer, decided to forgo the usual extensive due diligence process to vet the value and prospects of a company, according to multiple sources.
Axel Springer last month swooped to buy the Telegraph titles from UAE-backed RedBird IMI, thwarting a £500m deal agreed with Lord Rothermere, the owner of the Daily Mail by paying a substantial premium.
RedBird IMI, which was forced to put the titles up for sale after the British government passed a law limiting foreign states or associated individuals from owning newspaper assets in the UK, called the negotiations “swift and efficient”.
