Guardian signs deal to sell Observer newspaper to Tortoise Media

The Scott Trust and Guardian Media Group (GMG) have finally offloaded the Observer newspaper to digital start-up Tortoise Media in a cash and shares deal, foiling a rival bid from Ecotricity founder Dale Vince, it was announced on Wednesday.

Tortoise has pledged £25m in investment, including £5m from the Scott Trust itself. Journalists from the Guardian newspaper joined their Sunday print colleagues in a 48-hour strike to oppose the sale of the Observer which was founded in 1791.

Under the deal GMG will see it pay for both print and distribution services as well as marketing through the Guardian. The Scott Trust will have a 9% stake in Tortoise.

Lucy Rock has been appointed editor of the Observer’s print edition, the first woman to oversee the newspaper in 100 years. A digital editor is yet to be appointed. Both will report to Tortoise editor-in-chief James Harding.

Vince had promised to place the Observer inside his Green Britain Foundation in order to replicate its current trust-based ownership structure.

In a letter sent to Guardian executives on Wednesday, he added that he would keep the Observer's print edition and pointed out that a deal involving him would not require additional external investment, Sky News reported.

Reporting by Frank Prenesti for Sharecast.com