The controlling shareholder of the Daily Mail publisher has been accused of trying to take it private on the cheap.
In a sign of a potential investor revolt, Majedie Asset Management said that Lord Rothermere’s offer to take Daily Mail and General Trust private was not generous enough.
The fund, which has a 4.6 per cent stake, said that the £850 million bid for the rump of DMGT was “substantially below what we believe is a fair and reasonable valuation”.
Chris Field, fund manager at Majedie, said: “Our appraised valuation estimate of only the largest businesses within DMGT materially exceeds double the current offer price of 255p. We strongly urge shareholders not to accept the offer.”
His comments came hours after Rothermere, 53, unveiled the details of his plan to take the publisher off the stock exchange. The executive chairman is a descendant of the paper’s founder and owns a 36 per cent economic interest in DMGT and 100 per cent of the voting rights. The group, one of Britain’s largest news publishers, dates back to 1896. Its stable includes the Mail titles and Metro.
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In the summer, Rothermere unveiled his plan to buy the shares in DMGT that he didn’t already own. He sold RMS, a business that helps insurers to calculate catastrophe risk, to Moody’s, the credit rating agency, for £1.4 billion. The company then made a near-£1 billion profit from its investment in Cazoo, which recently was listed in America.
Under Rothermere’s plan, DMGT would distribute the proceeds of RMS and some of its cash pile via a special dividend of 568p a share. Shareholders would receive stock in Cazoo — 0.5749 Cazoo shares for every DMGT share they hold — worth 423p a share. Rothermere would then bid 255p a share, or about £823 million, for the rump of DMGT, plus a 17.2p-a-share dividend.
He needs to gain the approval of 90 per cent of independent investors to force holdouts to tender their shares. If he gets less than 90 per cent, Rothermere can lower the threshold to 50 per cent and DMGT would delist. Investors would be able to roll over their stakes into the unlisted company.
