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On 3 November 2021, Daily Mail and General Trust plc (DMGT), which owns Daily Mail, Mail on Sunday, the Metro and inews,  that it had agreed to the terms of a £2.7bn recommended offer from Rothermere Continuation Limited (RCL), a Bermuda registered company owned by a trust held for the benefit of Lord Rothermere and his immediate family (DMGT’s controlling shareholder). Calculated on the basis that shareholders receive £2.55 per share, a special dividend consisting of £5.68 and 0.5749 shares in Cazoo for each DMGT share and subject to approval, a final dividend of 17.3 pence per share, the deal values the company at £2.7bn at £12.63 per share. The offer represents a 21.5% premium to the closing price of DMGT shares on 9 July 2021 (the last business day prior to announcement of the possible offer). News of the firm approach saw DMGT shares close at £11.22, a 3% increase to the £10.90 that shares closed at on 2 November 2021. 

The offer follows from Rothermere’s approach in July 2021 (see: ) which offered shareholders £2.51 per share and a special dividend of £6.10 and Cazoo shares. According to the takeover documentation, the reduced cash payable under the special dividend in the firm offer is due to shareholders being offered a greater number of Cazoo shares and the additional contributions that will be made to DMGT pension schemes.  

The recommended offer comes after the completion of a number of pre-conditions that were specified in RCL’s July approach; the £1.4bn of DMGT’s insurance risk division, the of online car retailer Cazoo via a merger with SPAC Ajax I on the New York Stock Exchange and the reaching of a settlement with DMGT’s pension scheme trustees. One day prior to the announcement of the firm offer, DMGT that RCL and DMGT were close to agreeing a deal with DMGT’s pension scheme trustees, with one of the terms in agreement being a payment of approximately £400m into the schemes. DMGT’s pension scheme trustees may be the first to input in a takeover in Q4 2021, but they are certainly not the first this year, with Q3 2021 seeing pension scheme trustees involved in the bids for Morrisons and Ultra Electronics (see: and Practice Note: (a subscription to Lexis®PSL Corporate is required)).

The Rothermeres own approximately 30.3% of DMGT’s non-voting shares and as a result of a deal in 2013, control all of the voting shares in the group. Lord Rothermere is also the fourth member of his family to become executive chairman of the group. The takeover will require shareholder acceptances in respect of 90% of DMGT’s A shares in issue and should the deal proceed, will consolidate Lord Rothermere’s control over the publisher. Significant shareholder Majedie Asset Management, which a 4.63% stake in DMGT is reportedly against the takeover on the basis that the offer undervalues the company.

Lord Rothermere, executive chairman of RCL said of the deal:

‘We believe the terms of our Offer to be fair, particularly bearing in mind not only the existing level of debt within DMGT at a time of increasingly difficult market conditions, but also the restrictions imposed on the operation of the business as part of the settlement with the pension trustees.’

Market Tracker will continue to monitor this transaction as it develops.