LONDON, UK: Daily Mail and General Trust (DMGT) is in discussions in relation to the sale of its Insurance Risk division (RMS), while Rothermere Continuation Limited (RCL) prepared to make a possible cash offer to acquire the entire issued and to be issued share capital of DMGT not already owned by RCL.
While discussions are ongoing and there can be no certainty that a transaction will result, the Board of DMGT believes the terms of the proposed sale, if completed, would realise a premium valuation for DMGT’s shareholders.
Should terms be agreed, completion is expected to take place in Q3 2021 (calendar year).
The disposal of RMS would mark a further significant milestone in the transformation of DMGT, following the disposals in recent years of Hobsons, Genscape and Zoopla, which collectively realised c.£1.2 billion of value for DMGT, as well as the distribution of DMGT’s c.50% stake in Euromoney.
On top of the substantial cash proceeds that would arise from the sale of RMS, DMGT will have a further major asset upon completion of the business combination of Cazoo Holdings Limited (in which DMGT currently has a c.20% stake) with AJAX I, as referred to in the announcement made by DMGT on 29 March 2021.
It is expected that, upon Cazoo Completion, the Group will hold c.16% of the common stock of the listed Cazoo on a fully diluted basis.
The Board has considered whether, assuming both the completion of the sale of RMS and Cazoo Completion, it would be in shareholders’ interests to retain the cash proceeds and the Cazoo Shares or to distribute the resulting value directly to all shareholders, including RCL.
The Board has concluded that it would be in the best interests of shareholders to distribute the value expected to be created upon RMS Completion and Cazoo Completion through a special distribution and has discussed this conclusion with its controlling shareholder, Rothermere Continuation Limited (RCL).
Rothermere Continuation Limited (RCL) has indicated to the Board that, if RMS completion and Cazoo completion both happen, it would be prepared to make a possible cash offer to acquire the entire issued and to be issued share capital of DMGT not already owned by RCL.
Under the terms of the possible offer, and subject to the reservations set out below, holders of DMGT shares would receive 251 pence in cash for each DMGT share.
The Possible Offer implies an enterprise value of £810 million (with DMGT assuming debt with a fair value of approximately £230 million) for all of the trading and investment businesses of DMGT, excluding RMS, the Cazoo Shares and the cash subject to the Special Dividend.
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12 Jul, 10:28 am GMT+1 ·Disclaimer