Lord Rothermere has increased his bid for Daily Mail and General Trust by £35m in an attempt to secure support from shareholders who complained he was trying to take over the publisher of the UK’s bestselling daily newspaper too cheaply.
Within hours of the increased offer, however, one of DMGT’s largest investors warned it would still oppose the plan to delist the media company after a 90-year run on the stock market.
Majedie Asset Management, which has a 4.5 per cent stake, said it would “strongly urge” other shareholders not to accept the improved offer, made via a family investment vehicle of Jonathan Harmsworth, Viscount Rothermere.
The family, descendants of the Daily Mail’s founder and the company’s controlling shareholders, on Thursday said their increased offer price — from 255p to 270p a share — was “final” and would “not be increased”. DMGT said its independent directors considered the terms to be “fair and reasonable”.
To try to push through the deal, which, excluding dividends, gives the company an enterprise value of £885m, the family is exercising an option to adjust the required threshold of shareholder votes.
Under the updated terms, the Rothermeres need only to secure 50 per cent support to delist DMGT. Investors who are unwilling to sell will be offered shares in the resulting private company, which several fund managers have acknowledged they are reluctant or unable to accept.
Shareholders with a combined stake of almost 42 per cent are backing the deal, DMGT said. Most of the votes were from the Rothermeres, who hold a stake of about 34 per cent, although the company said Berry Street Capital Management, Maven Investment Partners, Syquant Capital and TIG Advisors were also supportive.
However, Chris Field, fund manager at Majedie, on Thursday said the offer was still pitched at a “significant discount” to the investment group’s own appraisal value of DMGT.
He called on the company’s independent directors to publish an independent valuation that formed the basis for their recommendation of the bid.
An “asymmetry of information disadvantages the non-family shareholders”, Field added.
JO Hambro Capital Management, which attacked the first offer as “neither fair nor supportable”, declined to comment on the sweetened bid.
Other terms remain unchanged from the earlier offer. These include a special dividend, comprising 568p a share in cash and an equity interest in Cazoo, the recently listed online car retailer.
Including the dividends, the new offer values the group at about £2.75bn, down from £2.9bn at the time of the original offer thanks to a decline in Cazoo’s share price.
DMGT has recently undertaken a radical restructuring, selling assets including the insurance risk modelling business RMS.
The company has been left more exposed to consumer media, with a portfolio of publications including Metro and the i as well as the Daily Mail, Mail on Sunday and MailOnline.
Shareholders have until December 16 to accept the offer.