(Alliance News) - The Rothermere family's acquisition vehicle on Thursday raised its takeover offer for Daily Mail & General Trust PLC and lowered its acceptance condition in order to get the deal for the London-based newspaper publisher over the line.
However, one of the largest independent shareholders of DMGT quickly rejected the offer as undervaluing the company.
Rothermere Continuation Ltd is the vehicle of DMGT's biggest shareholder Jonathan Harmsworth, Viscount Rothermere. It raised its offer by 5.9% to 270 pence per share in cash from 255p previously. The increase is worth an extra GBP40 million.
It also lowered its acceptance condition to 50% of DMGT, including its own shares. Rothermere said it currently owns or has acceptances for its offer from 41.8% of DMGT shares.
The independent directors of DMGT unanimously recommended the new offer to shareholders. Rothermere said it is final and set a December 16 deadline for acceptances.
In addition to the 270p per share cash offer, all shareholders will receive a special distribution of 568p and 0.57 of a Cazoo share per DMGT share.
However, Majedie Asset Management, which holds a 4.5% stake in the publisher on behalf of its pension fund and wealth management clients, said the raised offer still undervalues DMGT's remaining businesses, particularly its minority technology investments.
"It is our opinion that this revised offer announced today represents a significant discount to our appraisal value of the residual DMGT businesses," said Chris Field, a manager of Majedie funds.
"Our appraisal value is informed by comparative multiples for the residual businesses, the majority of which occupy leadership positions in their respective markets. It also recognises that balance sheet investments held at book value are materially undervalued."
Field pointed to DMGT's 1.2% stake in Zilch, a buy-now, pay-later platform that recently raised money at much higher valuation than at which DMGT invested.
"We continue to strongly urge shareholders not to accept the offer," Field said.
DMGT shares closed up 1.1% at 1,086.14p in London on Thursday. The company has a market capitalisation of just below GBP2.3 billion.
By Tom Waite; thomaslwaite@alliancenews.com
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