(Alliance News) - Daily Mail & General Trust PLC on Wednesday announced it was undertaking a major reorganisation of the company, which comprises the agreed takeover by Rothemere Continuation Ltd, and a proposed cash distribution to shareholders.
This follows the fulfilment of all pre-conditions for the takeover, which includes the payment of GBP412 million into the London-based newspaper publisher's main pension scheme.
Under the reorganisation, Rothemere will acquire all DMGT shares it does not own for 255 pence each, increased from the 251p bid announced in mid-July. In addition, all shareholders are to receive a special distribution of 568 pence and 0.5749 Cazoo shares per DMGT share.
Based on the closing of the used car business Cazoo on Tuesday at USD10.01, the special dividend has an aggregate value of 991 pence per share.
On this basis, adding a final dividend of 17.3 pence, shareholders outside of Rothemere Continuation stand to receive 1,263.00 pence per DMGT share, reflecting a 16% premium to the group's closing price of 1,090.00 pence on Tuesday.
Shares in Daily Mail & General Trust were up 2.4% at 1,116.00 pence on Wednesday afternoon in London.
The acquisition is now conditional on gaining shareholder approval of at least 90%, and approval of the special dividend.
"The sale of RMS and the Cazoo IPO have delivered excellent shareholder returns, but inevitably DMGT is now a considerably smaller group of businesses, with significantly greater exposure to consumer media. This has led RCL and the DMGT Board to decide to implement a major reorganisation of the group by distributing the value created by the RMS sale and the Cazoo IPO in conjunction with the offer," said Jonathan Harmsworth, director of Rothemere Continuation.
"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," Harmsworth added.
The Rothermere family is the largest shareholder with a 36% stake in DMGT, which has been listed on the stock market since 1932.
As well as the Daily Mail and Mail on Sunday, the group also owns Metro newspapers and recently acquired The i newspaper and New Scientist.
There had been three pre-conditions of a deal with RCL – a successful stock market listing of Cazoo, the sale of RMS and a deal with pensioners.
The pensions agreement had been the final sticking point holding up a final offer after Rothermere first made a takeover proposal in July, with the City takeover panel extending the bid deadline repeatedly while talks continued.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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