Rothermere’s Daily Mail Take-Private Deal Faces Opposition
Media Baron Rothermere Agrees to Take Daily Mail Owner Private
(Bloomberg) --
British media mogul Lord Rothermere faces opposition from one of its biggest shareholders after striking a deal to take the Daily Mail newspaper group private.
Majedie Asset Management owns 4.6% of DMGT’s Class A shares and will oppose the 2.6 billion pound ($3.6 billion) deal agreed by Rothermere and the Daily Mail & General Trust Plc, which was announced Wednesday following a complex breakup process.
The offer “is substantially below what we believe is a fair and reasonable valuation,” said Majedie U.K. income fund manager Chris Field in an emailed statement. “There is an inherent asymmetry of information working against non-family shareholders which we have urged the Non-Executives to address to allow shareholders to make an informed decision.
“We strongly urge shareholders not to accept the offer,” he added.
The deal currently needs 90% of DMGT’s Class A shareholders to accept, excluding the 30.3% of Class A shares and 100% of Ordinary shares held by Lord Rothermere’s trust and associate parties. However, this threshold can be lowered by Rothermere, according to the offer document.
Representatives for DMGT and Rothermere declined to comment.
Sweetened Offer
Following an initial proposal in July, DMGT’s independent directors agreed to a sweetened offer of 1,263 pence per share, which includes a cash payment, special dividend and proposed final dividend, DMGT and RCL said in the statement. The bid offers a 21.5% premium to the closing price of DMGT shares on the last business day before that July announcement, the statement said.
The stock rose 2.9% to 1,122 pence at 3:49 p.m. in London.
Rothermere is the aristocratic name of Jonathan Harmsworth, who chairs the business. Its best-known asset is the Daily Mail newspaper, founded by Harmsworth’s family in 1896.
His plan to buy out DMGT’s media assets has seen him and the company strike a deal with pension trustees, dispose of the group’s risk modeling business RMS for $2 billion, and see through the U.S. flotation of online car retailer Cazoo, in which it held a major stake.
DMGT is being hit hard by the global supply chain crisis, according to a presentation published alongside the offer.
“There have been substantial increases in the input costs for newsprint in supplier contracts at levels not seen since 1996,” the document said, adding that newsprint is the company’s second-largest cost. Options to mitigate this include “a review of employee numbers,” it added.
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