Rothermere mulls taking DMGT private in £810m deal

Daily Mail and General Trust’s largest shareholder is considering taking the media group private in a potential £810m deal, it was announced on Monday.

The firm said that Rothermere Continuation Ltd, which owns around 30%, had indicated it was prepared to make a possible cash offer of 251p per share for the entire share capital it did not already own, implying an enterprise value of around £810m.

Bermuda-based RCL is the holding company of DMGT’s executive chairman, Jonathan Harmsworth, the viscount Rothermere, who inherited his role as chair and controlling shareholder of DMGT on the death of his father in 1998. Lord Rothermere owns all of the issued voting shares, which means any deal that he backs and is recommended to shareholders will be approved. There is no mechanism for minority shareholders to rebel.

However, a bid is dependent on a number of factors, including the sale of DMGT’s insurance risk division RMS and the successful listing of Cazoo later this year.

DMGT said it had received "a number" of enquiries regarding the sale of RMS, adding: "While discussions are ongoing and there can be no certainty that a transaction would result, the board believes the terms of the proposed sale, if completed, would realise a premium valuation for DMGT’s shareholders."

In March, it was announced that Cazoo would debut in New York after agreeing to merge with a special purpose acquisition company called Ajax 1, in a deal that valued it at around £5bn. DMGT, which owns the Daily Mail, i and Metro newspapers, has a 20% stake in the online car retailer.

DMGT plans to return the cash proceeds of both the slated RMS sale and the Cazoo listing to shareholders through a special dividend, likely to be around 610p.

As at 1130 BST, shares in DMGT were ahead 3% at 1,072.0p.

Russ Mould, investment director at AJ Bell, said: "DMGT has for years owned stakes in various assets and it’s come to the stage where the Rothermere family thinks it could be best to take the business private.

"In a world where investors have been chasing the next big growth story, DMGT has been an under-appreciated player in this space; over the years it has made investments in various industries, including property, education and publishing.

"It is a profitable company overall, with many leading brands, including the Daily Mail newspaper and website, which would be a very attractive asset for another media group or even private equity to own. Perhaps the Rothermere family is acting now to avoid someone else stepping in and trying to bid."

The sale of RMS is likely to complete within the third quarter, should terms be agreed. DMGT did not disclose who the interested parties where, nor a potential value.

Under the Takeover Code, RCL has until 9 August to make a firm offer for DMGT or walk away.