DMGT.L Regulatory News (DMGT)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

2 December 2021

RECOMMENDED INCREASED AND FINAL CASH OFFER  

FOR 

DAILY MAIL AND GENERAL TRUST PLC ("DMGT") 

BY 

ROTHERMERE CONTINUATION LIMITED ("RCL")

On 3 November 2021, the Non-conflicted DMGT Directors and RCL announced that, as part of a major reorganisation of DMGT, they had reached agreement on the terms of a special distribution and recommended cash offer (the "Original Offer") to be made by RCL to acquire all the issued and to be issued DMGT A Shares not already owned by RCL (the "Original Offer Announcement"). Defined terms used but not defined in this announcement have the meanings given in the Original Offer Document (as defined below) unless the context requires otherwise.

1. RECOMMENDED INCREASED AND FINAL CASH OFFER

RCL and the Non-conflicted DMGT Directors are pleased to announce the terms of a recommended increased and final cash offer for all the issued and to be issued DMGT A Shares not already owned by RCL (the "Final Offer"). Under the terms of the Final Offer:

· DMGT A Shareholders will be entitled to receive:

270 pence in cash for each DMGT A Share (the "Final Offer Price"); and

· RCL will be lowering the Acceptance Condition Threshold (see paragraph 2 below).

The Final Offer Price represents a 5.9 per cent. (5.9%) increase on the offer price of the Original Offer. This is in addition to the extra approximately £40 million cost which RCL agreed to bear, at the time of the Original Offer Announcement, in relation to the 2021 Proposed Final Dividend. RCL confirms that the financial terms of the Final Offer are final and will not be increased. The Special Dividend and the 2021 Proposed Final Dividend are unchanged by this announcement.

RCL has informed DMGT, as DMGT Shareholders have been notified in the Original Offer Announcement and in the Original Offer Document, that, following the Final Offer becoming or being declared unconditional, and subject to any applicable requirements of the FCA, RCL intends to procure that DMGT will make applications to cancel the listing of all DMGT A Shares on the FCA's Official List and to cancel trading in all DMGT A Shares on the London Stock Exchange's main market for listed securities. Following such cancellation, RCL intends to procure that DMGT will be re-registered as a private limited company.

In line with the Original Offer Announcement, the Final Offer remains conditional on the declaration of the Special Dividend; and settlement of the Special Dividend will be conditional upon the Final Offer becoming or being declared unconditional. Therefore, in the event that the Final Offer does not become or is not declared unconditional, there will be no Special Dividend. RCL is enthusiastic about the future prospects of Cazoo and expects to remain a long-term investor in the company following the distribution of the Share Element of the Special Dividend.

In accordance with Rule 32.2 of the Code, if, after the date of this announcement, any dividend and/or other distribution is announced, declared, made or paid in respect of the DMGT Shares, other than the Special Dividend and the 2021 Proposed Final Dividend, or if the terms of the Special Dividend or the 2021 Proposed Final Dividend are increased, RCL shall reduce the Final Offer Price by the amount of such dividend and/or other distribution or increase.

Except as otherwise stated in this Announcement, all of the other terms and conditions of the Transaction, including the Offer, remain unchanged from those set out in the offer document published in connection with the Original Offer on 6 November 2021 (the "Original Offer Document").

2. LOWERING OF ACCEPTANCE CONDITION THRESHOLD

The Final Offer remains conditional on the Acceptance Condition being satisfied. RCL has decided hereby to lower the acceptance threshold so that the Acceptance Condition shall be satisfied if valid acceptances of the Final Offer have been received (and not validly withdrawn in accordance with the rules and requirements of the Code and the terms of the Final Offer) by no later than 1.00 p.m. (London Time) on the Unconditional Date (or such later time(s) and /or date(s) as RCL may specify, subject to the rules of the Code and, where applicable, the consent of the Panel) so that, taken together with DMGT Shares which it already holds, RCL has acquired or agreed to acquire pursuant to the Final Offer or otherwise more than 50 per cent. (50%) of all DMGT Shares (or such lower percentage as RCL may decide, with the consent of the Non-conflicted DMGT Directors).

Shareholders have until 1.00 p.m. (London time) on 16 December 2021, being the Unconditional Date, to accept the Final Offer. If the Acceptance Condition is not satisfied by this time, the Final Offer will lapse and DMGT A Shareholders will not receive any cash under the terms of the Final Offer, and there will be no Special Dividend. DMGT A Shareholders will continue to hold their DMGT A Shares. 

3. DIVIDEND POLICY

In the Original Offer Document, DMGT Shareholders were notified that the DMGT Board intended to review the dividend policy applicable to FY 2022 with a view to communicating a revised dividend policy with the half year results for the six months ending 31 March 2022. Bearing in mind the lowering of the Acceptance Condition threshold, and RCL's intention to procure delisting of the DMGT A Shares if the Final Offer becomes or is declared unconditional and the Special Dividend is paid, DMGT Shareholders are reminded that the DMGT Board anticipates that any future dividends per share paid to holders of the DMGT A Shares will be materially lower than they have been historically.

4. RECOMMENDATION FROM THE NON-CONFLICTED DMGT DIRECTORS

The Non-conflicted DMGT Directors, who have been so advised by J.P. Morgan Cazenove and Credit Suisse as to the financial terms of the Final Offer taking into account the Special Dividend, consider the terms of the Final Offer to be fair and reasonable. In providing their financial advice to the Non-conflicted DMGT Directors, J.P. Morgan Cazenove and Credit Suisse have taken into account the commercial assessments of the Non-conflicted DMGT Directors. J.P. Morgan Cazenove is providing independent financial advice to the Non-conflicted DMGT Directors for the purposes of Rule 3 of the Code.

Accordingly, the Non-conflicted DMGT Directors unanimously recommend that DMGT A Shareholders accept or procure acceptance of the Final Offer by not later than 1.00 p.m. on 16 December 2021.

5. IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

RCL owns 58,207,016 DMGT A Shares representing 27.6 per cent. (27.6%) of the issued DMGT A Shares and 19,890,364 DMGT Ordinary Shares (being all of the issued DMGT Ordinary Shares), which together with RCL's DMGT A Shares represent 33.9 per cent. (33.9%) of all issued DMGT Shares. RCL's concert parties own a further 5,565,589 DMGT A Shares representing 2.6 per cent. (2.6%) of the issued DMGT A Shares, none of which have to date accepted the Final Offer. However, RCL has received a letter of intent from The Rothermere Foundation, a concert party of RCL, to accept the Final Offer in respect of 4,687,424 DMGT A Shares.

RCL has also received letters of intent from the following, who presently have an interest in DMGT A Shares pursuant to derivatives, to materialise their interests in DMGT A Shares so that they become the legal and/or beneficial owners of the same number of DMGT A Shares and accept the Final Offer:

· Berry Street Capital Management LLP in respect of its interest, and that of certain entities in respect of which it acts as discretionary portfolio manager, in 3,364,273 DMGT A Shares;

· Maven Investment Partners Ltd in respect of its interest in 3,304,431 DMGT A Shares;

· Syquant Capital in respect of its interest in 2,439,301 DMGT A Shares; and

· TIG Advisors, LLC in respect of its, and certain of its controlled entities', interests in 3,247,089 DMGT A Shares.

RCL has also received irrevocable undertakings from relevant Non-conflicted DMGT Directors to accept, or procure the acceptance of, the Final Offer in respect of a maximum of 1,071,952 DMGT A Shares.

RCL has therefore received irrevocable undertakings and letters of intent in respect of, in aggregate, 18,114,470 DMGT A Shares, representing approximately 8.6 per cent. (8.6%) of the issued DMGT A Shares and 7.9 per cent. (7.9%) of all issued DMGT Shares.

RCL already owns and has received acceptances, irrevocable undertakings and letters of intent to accept the Final Offer in respect of, in aggregate, 76,610,195 DMGT A Shares, representing approximately 36.3 per cent. (36.3%) of the issued DMGT A Shares. This number, when taken together with the 19,890,364 DMGT Ordinary Shares that RCL already owns represents 41.8 per cent. (41.8%) of all issued DMGT Shares.

Further details of these irrevocable undertakings and letters of intent are set out in the Appendix to this announcement.

All percentage interests of shareholdings in this section have been calculated as at 1 December 2021 (being the last Business Day before the date of this announcement).

6. FINANCING OF THE FINAL OFFER

Lazard, in its capacity as financial adviser to RCL, is satisfied that sufficient resources are available to RCL to satisfy in full the Final Offer Price payable to DMGT A Shareholders pursuant to the Final Offer.

7. PUBLICATION OF THE FINAL OFFER DOCUMENT

An offer document containing details of the terms of the Final Offer (the "Final Offer Document"), together with updated Forms of Acceptance (the "Forms of Acceptance"), will be published today and posted to DMGT A Shareholders.

Participants in any share schemes of DMGT will be contacted regarding the effect of the Final Offer on their rights under these schemes and provided with further details concerning the proposals which will be made to them in due course. Details of the proposals will be set out in separate letters to be sent to participants in the share schemes.

Acceptances of the Original Offer shall be deemed to be acceptances of the Final Offer in accordance with paragraph 4 of Part D of Appendix 1 to the Original Offer Document. Therefore, DMGT A Shareholders who have already validly accepted (and not validly withdrawn) their acceptance of the Original Offer are not required to take any further action in respect of the Final Offer.

8. GENERAL

This announcement should be read in conjunction with the full text of the Original Offer Announcement and the Original Offer Document, copies of which are available on DMGT's website at https://www.dmgt.com/investors.

Lazard, Goldman Sachs, J.P. Morgan Cazenove and Credit Suisse have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.

Enquiries 

Disclaimers

Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the United Kingdom by the FCA, is acting as lead financial adviser to RCL, and no one else, in connection with the Final Offer, and will not be responsible to anyone other than RCL for providing the protections afforded to clients of Lazard nor for providing advice in relation to the Final Offer, or any other matter or arrangement referred to herein. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any matter, arrangement or statement contained or referred to herein or otherwise.

Goldman Sachs International ("Goldman Sachs"), which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting as joint financial adviser to RCL, and no one else, in connection with the Final Offer, and will not be responsible to anyone other than RCL for providing the protections afforded to clients of Goldman Sachs nor for providing advice in relation to the Final Offer or any other matter or arrangement referred to herein. Neither Goldman Sachs nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goldman Sachs in connection with the Final Offer, this announcement, any matter, arrangement or statement contained or referred to herein or otherwise.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the PRA and the Financial Conduct Authority (the "FCA"). J.P. Morgan Cazenove is acting as lead financial adviser for DMGT and no one else in connection with the Final Offer only and will not regard any other person as its client in relation to the Final Offer or any other matter referred to in this announcement and will not be responsible to anyone other than DMGT for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the Final Offer or any matter or arrangement referred to herein.

Credit Suisse International ("Credit Suisse"), which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting as joint financial adviser for DMGT and no one else in connection with the Final Offer only and will not regard any other person as its client in relation to the Final Offer or any other matter referred to in this announcement and will not be responsible to anyone other than DMGT for providing the protections afforded to clients of Credit Suisse, nor for providing advice to any other person in relation to the content of this announcement or any other matter referenced herein. Neither Credit Suisse nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Credit Suisse in connection with this announcement, any statement contained herein or otherwise.

Important information

This announcement is for information purposes only and is not intended to and does not constitute, or form part of, any offer or invitation to sell or purchase any securities, or the solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Final Offer or otherwise nor shall there be any sale, issuance or transfer of securities of DMGT in any jurisdiction in contravention of applicable law. The Final Offer will be effected solely through the Final Offer Document which will contain (or have incorporated by reference from the Original Offer Document) the full terms and conditions of the Final Offer. Any decision in respect of, or other response to, the Final Offer should be made only on the basis of the information contained in the Final Offer Document and accompanying Form of Acceptance. Each DMGT A Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences of the Final Offer applicable to them.

Overseas Shareholders

Unless otherwise determined by RCL, the Final Offer will not be, made, directly or indirectly, in or into or by the use of mails of, or by any other means (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national securities exchange of, any Restricted Jurisdiction, and will not be capable of acceptance by any such use, means or facility or from within any Restricted Jurisdiction. Accordingly, unless otherwise determined by RCL, copies of this announcement and the formal documentation relating the Final Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) should observe these restrictions and must not mail, or otherwise forward, send or distribute any such documents in or into or from any Restricted Jurisdiction, as doing so may invalidate any purported acceptance of the Final Offer. Any person (including custodians, nominees and trustees) who would, or otherwise intends to, or who may have a legal or contractual obligation to, forward this announcement and the formal documentation relating the Final Offer to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of, any jurisdiction, seek appropriate advice and read the relevant sections of the Final Offer Document before doing so. Neither the US Securities and Exchange Commission ("SEC") nor any US state securities commission has approved or disapproved this Final Offer, or passed upon the adequacy or completeness of this document. Any representation to the contrary is a criminal offence.

This announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws and regulations of any jurisdiction outside England.

Notice to US holders of DMGT A Shares

The Final Offer relates to securities in a non-US company registered in England and Wales with a listing on the London Stock Exchange, and is subject to the disclosure requirements, rules and practices applicable to companies listed in the United Kingdom, which differ from those of the United States in certain material respects. This announcement has been prepared in accordance with U.K. style and practice for the purpose of complying with the laws of England and Wales and the rules of the London Stock Exchange. The Final Offer will be made in the United States pursuant to Section 14(e) of, and Regulation 14E under, the US Securities Exchange Act of 1934, as amended, subject to the exemptions provided by Rule 14d-1 under the US Exchange Act and otherwise in accordance with the requirements of the Code. Accordingly, the Final Offer will be subject to disclosure and other procedural requirements that are different from those applicable under US domestic tender offer procedures. US shareholders should note that the Company is not listed on an American securities exchange, subject to the periodic reporting requirements of the US Exchange Act or required to, and does not, file any reports with the SEC thereunder.

It may be difficult for US shareholders to enforce certain rights and claims arising in connection with the Final Offer under US federal securities laws since the Company is located outside the United States and its officers and directors reside outside the United States. It may not be possible to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. It also may not be possible to compel a non-US company or its affiliates to subject themselves to a US court's judgment.

To the extent permitted by applicable law and in accordance with normal UK practice, RCL, J.P. Morgan Securities plc, Credit Suisse International, Lazard & Co., Limited, Goldman Sachs International or any of their affiliates holding an exempt status granted by the Panel, subject to restrictions under Rule 38 of the Code, may make certain purchases of, or arrangements to purchase DMGT A Shares outside the United States during the period in which the Final Offer remains open for acceptance, including sales and purchases of DMGT A Shares effected by J.P. Morgan Securities plc, Credit Suisse International, Lazard & Co., Limited or Goldman Sachs International, acting as market maker in the DMGT A Shares. These purchases, or other arrangements, may occur either in the open market at prevailing prices or in private transactions at negotiated prices. In order to be excepted from the requirements of Rule 14e-5 under the US Exchange Act by virtue of relief granted by Rule 14e-5(b)(12) thereunder, such purchases, or arrangements to purchase, must comply with applicable English law and regulation, including the listing rules of the FCA, and the relevant provisions of the US Exchange Act. Any information about such purchases will be disclosed as required in the United Kingdom and the United States and, if required, will be reported via a Regulatory Information Service of the London Stock Exchange and available on the London Stock Exchange website at www.londonstockexchange.com. To the extent that such information is made public in the United Kingdom, this information will also be publicly available to shareholders in the United States.

Disclosure requirements of the Code 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of the offeree company. An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period. Relevant persons who deal in the relevant securities of the offeree company prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of the offeree company, save to the extent that these details 3 have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website 

Pursuant to Rule 26.1 of the Code, a copy of this announcement, the irrevocable undertakings and letters of intent described in Appendix to this announcement and other documents in connection with the Final Offer will, subject to certain restrictions, be available for inspection on DMGT's website at https://www.dmgt.com/investors no later than 12 noon on the business day following this announcement. The contents of the websites referred to in this announcement are not incorporated into, and do not form part of, this announcement. 

Requesting hard copy documents 

In accordance with Rule 30.3 of the Code, DMGT A Shareholders and persons with information rights may request a hard copy of this announcement by contacting Fran Sallas, DMGT Company Secretary (+44 (0) 20 3615 2904). For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Final Offer should be in hard copy form.

Information relating to DMGT Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by DMGT Shareholders and other relevant persons for the receipt of communications from DMGT may be provided to RCL during the offer as required under Section 4 of Appendix 4 of the Code.

Forward-Looking Statements

This announcement may contain certain forward-looking statements with respect to the financial condition, results of operations and business of DMGT and certain plans and objectives of RCL with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by DMGT and/or RCL in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this document. Neither DMGT nor RCL assumes any obligation to update or correct the information contained in this document (whether as a result of new information, future events or otherwise), except as required by applicable law.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. These factors include uncertainties surrounding the Covid-19 pandemic and the ongoing impact of the Covid-19 pandemic on general economic conditions.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments.

Time

All times shown in this announcement are to the local time in London, United Kingdom, unless otherwise stated.

APPENDIX

IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Irrevocable undertakings

The following DMGT A Shareholders have each given an irrevocable undertaking to accept the Final Offer:

These irrevocable undertakings will cease to be binding if the Final Offer is withdrawn or lapses in accordance with its terms.

Letters of intent

The following DMGT A Shareholder has given a letter of intent to accept the Final Offer:

The following DMGT A Shareholders have each given a letter of intent to materialise their interests in DMGT A Shares so that they become the legal and/or beneficial owners of the same number of DMGT A Shares and accept the Final Offer:

Copies of these irrevocable undertakings and letters of intent are available on DMGT's website at https://www.dmgt.com/investors