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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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”.
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
Nationwide: UK house prices creep up by 0.2% - are we heading for a rebound?
Nationwide’s latest house price index shows property prices inched up by 0.2% as demand warms up - will this trend go into 2024?
By Kalpana Fitzpatrick Published
December 2023 NS&I Premium Bond winners revealed - have you won the jackpot?
Two Premium Bond holders are now millionaires as NS&I reveals December winners. Find out if you’re one of them
By Vaishali Varu Published
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
By Dr Matthew Partridge Published
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
By Jane Lewis Published
Three defence stocks set to flourish in an era of instability
A professional investor tells MoneyWeek where he’d put his money. Tom Bailey highlights three defence stocks that look promising.
By Tom Bailey Published
EasyJet shares rise after record results
The EasyJet group has shrugged off the cost-of-living crisis, restarted dividends and shares look good value.
By Dr Matthew Partridge Last updated
The fallout from the war on landlords
Investors fleeing the market and the rise in rents are affecting us all.
By Charlie Ellingworth Published
Eight small-cap trusts to bet on
Funds investing in market minnows are out of favour, but the cycle will turn. Here are the best bets.
By Max King Published
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published