Pandemic plunderers target Daily Mail

Share in Daily Mail and General Trust jumped by 10% this week after rumours that the newspaper business would be taken private.

Daily Mail
(Image credit: © Jason Alden/Bloomberg via Getty Images)

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”.

Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri