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Tortoise Media to potentially acquire the Observer

ended 19. September 2024

Tortoise Media, a media startup formed in 2019, has announced it is in talks with the Guardian Media Group over the purchase of the world’s oldest Sunday newspaper, The Observer.

In a statement on its website, Tortoise Media committed to investing £25 million in The Observer over a five-year period. However, there are valid yet unanswered questions as to how the deal will be financed.

In its last financial reports for 2022, Tortoise Media made an operating loss of £4.6 million on revenues of £6.2 million. According to Tortoise Media’s latest annual report, the company said in December 2023 that it is raising £1.1 million in funding from investors and the company “will have sufficient funds for at least the next 12 months.” The company has not yet provided a breakdown who invested in the latest funding round of £1.1 million. 

According to documents filed with Companies House, as of December of 2023 the three biggest shareholders were James Paul Harding, Tortoise founder (32.5%); Woodbridge Investments, a company owned by Canada’s wealthiest family, Thomson, who are also owners of Thomson Reuters (16.1%); and Lansdowne Developed Markets Master Fund, a hedge fund (11.8%). Out of these three, the Thomson family and Lansdowne could have deep enough pockets to finance a £25 million deal.

We’re keen to get your views as media and/or investment experts as to what’s really happening here and how a company in Tortoise’s position financially can make an acquisition of this size? Apparently Tortoise and The Observer are in ‘formal and exclusive negotiations” but for negotiations to be formal, surely money has to be on the table? So where’s that money coming from? Any thoughts, send them across.

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Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
Behind the Tortoise's shell, The Observer acquisition could be seen as a clever disguise for big media's expansion. On first reading, the David versus Goliath story of a £25 million gambit for the world's oldest Sunday newspaper represented an audacious attempt to reshape the landscape of British journalism. However, this proposed acquisition raises legitimate questions about whether this could be a sophisticated greenwashing exercise orchestrated by established media players. With major shareholders like the Thomson family, who hold a 16.1% stake through Woodbridge Investments, this is a far cry from the start-up’s inception. Its launch was marked by a successful crowdfunding campaign on Kickstarter, with many supporters drawn to the concept of a community-driven journalism model. This evolution in ownership serves as a stark reminder that even media startups with community-focused beginnings can quickly transform into traditional corporate entities and abandon their original ethos.