Rothermere bows to investor pressure, lifts bid for DMGT

The Rothermere family on Thursday bowed to investor pressure and increased the cash element of its buyout bid for the company that publishes the right-wing Daily Mail newspaper.

Minority shareholders have been given a final take-it-or-leave it offer of 270p a share, an increase of 5.9% from the original offer for their Daily Mail and General Trust (DMGT) stock. The threshold for acceptances was also lowered to 50%.

Family head Jonathan Harmsworth last month came under pressure to increase his £850m bid to take the company private as investors called his offer “opportunistic”.

Majedie Asset Management, which has a 4.6% stake in DMGT, said the proposed offer by the Rothermere family was “substantially below” fair value.

Harmsworth, who is DMGT chairman and controlling shareholder with 36%, had already increased his offer once to 255p in cash plus debt for each DMGT share.

Harmsworth’s attempt to take DMGT’s consumer business private is part of a complex deal with a series of pre-conditions, which have now been cleared.

It involved selling the insurance risk business RMS, securing the New York listing of online used car seller Cazoo so it could distribute its 17% stake to shareholders and pumping £412m into the firm’s three pensions funds.

A special payment of 991p per share and a final dividend of 17.3p per share remain unchanged under the new deal.

Minority shareholders have until December 16 to decide whether to accept the offer.