Shares in the Daily Mail and General Trust (DMGT) jumped by 10% this week after the group said that the Rothermere family, which owns 36% of it, “may take the... newspaper business private if the sale of its insurance-risk unit and online car seller Cazoo goes through”, says Ed Cropley on Breakingviews.
If this happens, shareholders will get 251p a share as well as a “special dividend” of 610p and DMGT’s stake in the insurance company Cazoo. This amounts to “nearly £12.70 per share”, a sizeable premium over the £10.60 the stock traded at before the news was announced.
DMGT’s decision to take itself private is ironic, given the Daily Mail’s “crusade” against “pandemic plundering” – the takeover spree “that has seen more than 100 UK companies disappear from the stockmarket”, says Ben Marlow in The Daily Telegraph.
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But with the attractions of being a listed entity “not what they once were”, it’s hard to understand why DMGT has remained public for so long. It “hasn’t raised any capital from shareholders in the... 90 years since floating”. And its shares are on a discount thanks to an “unusual governance set-up”: the owner has 36% of the stock, but all the voting rights.
The family’s voting rights mean that any attempts to stop the deal may be “futile”, says Nils Pratley in The Guardian. But shareholders should ask some “awkward questions”. The 251p a share they are being offered for the paper and related businesses “does not look generous” when you consider that earnings at the Daily Mail’s titles and the exhibitions business are in “recovery mode from the pandemic”.
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