One of the world’s most successful private equity chiefs is being lined up to help fund a takeover of The Observer, the world’s oldest Sunday newspaper.
Sky News has learnt that Patrick Healy, the chief executive of Hellman & Friedman (H&F), a US-based buyout firm, is among the Tortoise Media shareholders who are in talks to commit millions of pounds in a five-year investment plan for the title.
Talks about a deal between Guardian Media Group, The Observer’s owner for the last three decades, and Tortoise Media, a five-year-old start-up, have been ongoing for months.
They were disclosed publicly in September, and are believed to have weeks left to run before a formal agreement is reached.
The deal has sparked controversy among Guardian and Observer journalists, who argue that staff on the Sunday newspaper – which traces its roots back to 1791 – should be protected by the same safeguards as those provided to The Guardian by the Scott Trust.
Earlier this month, an open letter signed by leading figures from the arts and culture including Bill Nighy, Hugh Grant, Mary Beard and Ralph Fiennes labelled the prospective deal “disastrous”.
“While figures of £100m are being bid for other publications [a reference to the recent sale of The Spectator magazine], this poorly funded approach sets the value of the Observer at or near zero,” the letter said.
“The proposal also envisages moving it from a resilient and well-funded newspaper publisher to a small, loss-making digital start-up whose funding for the takeover would in all likelihood come from private equity.”
Mr Healy is not the only Tortoise Media shareholder keen to participate in its new funding round, with David Thomson, the chairman of Thomson Reuters and Woodbridge, his family office, also thought to be interested.
Both Mr Healy and Mr Thomson are already identified as minority investors in Tortoise Media’s share register.
Mr Healy has a long pedigree as an investor in the media industry…
