The publisher of the Daily Mail (DMGOa.L) said on Wednesday its founder and controlling shareholder, the Rothermere family, had agreed to the terms to take the company private, comprising a cash, dividends and shares offer valued at 1,263 pence a share.
The Rothermeres announced their plan to buy out other shareholders in July, with the move dependent on the sale of the company’s insurance business, Risk Management Solutions, and a listing of online car seller Cazoo, which it partly owns.
Both conditions have now been fulfilled.
Under the terms of the offer, shareholders will receive 255 pence in cash, a special dividend of 568 pence and 0.5749 Cazoo shares for each share.
The value of the offer is slightly higher than indicated in July, and represents a 21.5% premium to the closing price of the stock on the day before the plan was announced.
However one large investor, Majedie Asset Management, said the offer was “substantially below” what it believes is a fair and reasonable valuation.
The Daily Mail was first published in 1896 by the ancestors of DMGT chairman Jonathan Harmsworth, the Viscount Rothermere.
He said DMGT was a considerably smaller business following the sale of RMS and the listing of Cazoo, with significantly greater exposure to consumer media.
“We believe the terms of our offer to be fair, particularly bearing in mind not only the existing level of debt within DMGT at a time of increasingly difficult market conditions, but also the restrictions imposed on the operation of the business as part of the settlement with the pension trustees,” he said.
DMGT’s liquidity has been constrained by its dual-share structure, with voting rights only granted to some stock, tightening the family’s hold on the company.
The Rothermeres and their associates control 30.3% of the A shares and all of the ordinary shares.
Chris Field, a fund manager at Majedie, said non-family shareholders did not have as much information as the Rothermeres. Majedie owns 4.6% of DMGT A shares on behalf of its clients.
“Our appraised valuation estimate of only the largest businesses within DMGT materially exceeds double the current offer price of 255 pence,” he said in a statement. “We strongly urge shareholders not to accept the offer.”