- Stocks rise up to 10% in early trades
- Rothermeres’ offer conditional on the conclusion of certain transactions
- DMGT foresees a special dividend for the listing of Cazoo and the sale of RMS
July 12 (Reuters) – The founding family and main investor of the publisher of the British newspaper Daily Mail are considering privatizing the group in a $ 1.1 billion deal as part of a dismantling of the business.
The Daily Mail and General Trust (DMGT) (DMGOa.L) said the Rothermeres, who own 28% of the company, are willing to make a cash offer to buy the group, on condition that it sells its business of RMS insurance risk and that the online car seller Cazoo’s listing, which it partially owns, continues.
Shares of DMGT, which publishes the Daily Mail tabloid, The Mail on Sunday and MailOnline, climbed 10% to their highest level in more than two decades at the start of trading. They were up 3.3% to 1,074 pence at 12:40 GMT.
The Daily Mail was first published in 1896 by the ancestors of current DMGT chairman Jonathan Harmsworth, Viscount Rothermere.
The Mail has weathered the long-term decline in newspaper sales better than its competitors, overtaking Rupert Murdoch’s Sun to become the UK’s top-selling newspaper last year, and wielding political influence as a voice curator of the “middle of England”.
The group’s website – MailOnline – is among the most visited English-language news sites in the world thanks to its celebrity-focused formula.
DMGT, which has shrunk in recent years to focus on its core news business, said on Monday it was in talks to sell RMS under a deal that could be finalized before the end of September. .
Without its stakes in Cazoo and RMS – which offers risk modeling for businesses – DMGT would include news publishing and its real estate events and information activities.
DMGT has announced its intention to distribute the proceeds from a sale of RMS along with its cash and stake in a listed company Cazoo via a special dividend, with a cash component of around 610 pence.
The company’s stake in Cazoo could be worth $ 1.35 billion after the IPO, expected in the current quarter.
Subject to transactions, the Rothermeres are said to be willing to offer 251 pence for every DMGT share, DMGT said.
Berenberg analysts said the approximate value of the terms implied a per share value of 1,261 pence, a 21% premium over Friday’s closing price.
“The bonus does not represent a knockout offer, but given that the Rothermere holding company already controls the group, there are not really any other alternatives, and compared to the DMGT share price earlier in the year , this is obviously a very significant increase, ”they said.
“So it is unlikely that we will see a much more generous offer appearing elsewhere.”
DMGT’s liquidity was limited by its dual-share structure, with voting rights only granted to certain shares, which strengthened the family’s grip on the company.
Reporting by Muvija M and Pushkala Aripaka in Bengaluru and Paul Sandle in London; Editing by Rashmi Aich, Louise Heavens and Keith Weir
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