Guardian Media Group (GMG) is in talks to sell The Observer, the world’s oldest Sunday newspaper, to Tortoise Media, a start-up founded five years ago by a former BBC and Times executive.
Sky News can exclusively reveal that GMG was in the process of informing staff on The Observer on Tuesday that it is in exclusive discussions with Tortoise Media about a sale of the title.
Talks are said to have been under way for some time, although banking sources cautioned that it was possible that a deal might not be reached.
Tortoise Media is understood to be committing an investment of £25m in The Observer in the first five years of its ownership.
The potential price that would be paid by Tortoise Media, which was established by James Harding in 2019, and other key details of the prospective transaction were unclear.
A deal to sell The Observer would reshape Britain’s declining Sunday newspaper market, and will raise questions about whether The Guardian plans to extend its six day a week print operation to Sundays.
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One source said that GMG had been given approval by The Scott Trust, which oversees The Guardian’s stewardship, to explore a deal.
They added that there was a belief among GMG executives that the investment required to provide a robust digital future for The Observer was more likely to be provided by a third party as The Guardian focuses on its own internationally renowned reporting.
Tortoise Media has 120,000 subscribers to its Daily Sensemaker newsletter, while its podcasts attract between two million and three million downloads each month.
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It has been backed by Thomson Reuters chair David Thomson, Lansdowne Partners and LocalGlobe, a leading venture capital firm, since its launch.
Mr Harding is a former editor of The Times and head of news at the BBC, and set up Tortoise Media in a bid to provide deeper insight into and analysis of significant global stories.
A spokesman for Tortoise Media said: “We believe The Observer is one of the greatest brands in news, and we believe passionately in its future both in print and digital formats.
“The idea of it combining with our newsroom, to marry our expertise in podcasts and live events, and their exceptional record in reporting and original thinking, as well as their passion for music and film and food, is one we are keen to explore.”
The Observer is thought to employ fewer than 100 full-time and freelance staff on a standalone basis.
It was founded in 1791 by WS Bourne on the simple premise that “the establishment of a Sunday newspaper would obtain him a rapid fortune”.
GMG acquired the title in 1993.
The potential deal comes amid a shake-up in the British national newspaper industry, with The Daily Telegraph and its Sunday sister title in the process of being sold.
A spokeswoman for GMG declined to comment.