LONDON (Alliance News) - Daily Mail & General Trust PLC on Monday said the shareholding of the family of Lord Rothermere will increase to 36% from 24% as a result of a planned return of Euromoney Institutional Investor PLC shares to DMGT shareholders and a related DMGT share reduction.
The rise in stake is because the Rothmere family will not take part in the Euromoney share return, and will only participate partially in the DMGT share reduction and associated GBP200 million cash return.
Under the proposed distributions, Rothermere Continuation Ltd and Rothermere Investments Ltd shareholders will receive GBP17 million in aggregate in cash. This is 65% less than the amount they would have received had they participated fully in the cash distribution. Also, GBP17 million is 92% less than the value they would have received if had participated fully in all the proposed distributions.
Meanwhile, DMGT said each of its A share holder will receive 0.19933 Euromoney share, plus 68.13p in cash. The company said the number of its A shares will be reduced as part of the capital distributions, on the basis of a reduction of 0.46409 of a share for each existing A share.
The company said its voting ordinary shares won't participate in any of the transactions announced on Monday.
"The proposed distributions that we have announced today are fully aligned with our strategic priorities of increasing the focus of our portfolio and maintaining financial flexibility, whilst at the same time improving the efficiency of our balance sheet," said DMGT Chief Executive Paul Zwillenberg.
On Monday last week, DMGT confirmed that it was considering selling its remaining 49% interest in FTSE 250-listed business events organiser and publisher Euromoney and returning the proceeds to shareholders. This Monday, DMGT provided the details of the distribution, with a direct return of Euromoney shares to DMGT shareholders, plus GBP200 million in cash, together worth about GBP896 million.
This follows a review by the DMGT board that concluded that its capital and cash resources are in excess of its current requirements and that a GBP896 million distribution to shareholders is appropriate, it said.
Euromoney on Monday noted DMGT's announcement and said if the proposed distribution proceeds, the existing relationship deed between Daily Mail and Euromoney will terminate. Thus, DMGT's representative directors on the Euromoney board will step down.
"The proposed distribution would result in a more diversified shareholder base for Euromoney and we would expect it to result in increased liquidity in our shares," said Euromoney Chief Executive Andrew Rashbass. "It will also underline Euromoney's status as a fully independent company."
DMGT shares were up 4.5% at 676.00 pence early Monday, while Euromoney shares were down 3.9% at 1,250.00p.