New rules see Daily Mail owner lose index place

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The Independent Online

Daily Mail & General Trust (DMGT) will be dropped from the stock market's FTSE indices in June after a change in the rules about companies with non-voting shares.

The owner of the Daily Mail newspaper, which is presently a member of the FTSE 250, will be dropped from all the FTSE's UK indices in June as part of a wider shake-up.

Stock market chiefs want to give precedence to companies whose shares carry voting rights because it means investors have a greater say.

At DMGT, its chairman Viscount Rothermere and his family control most of the voting shares while others can generally buy only non-voting shares.

Alex de Groote, an analyst at Panmure Gordon, said some investors had not understood about the switch when DMGT presented half-year results earlier this week and it had been a "source of confusion".

DMGT issued a statement yesterday to clarify the situation.

Mr de Groote said that the £1.6bn newspaper, events and financial information group had "strong fundamentals" but "these are being overshadowed" by the change to the listing.

Lorna Tilbian, an analyst at Numis Securities, said it was "very unhelpful" in the short term, as the group's exit from the leading London index could put pressure on the shares. Some investors such as passive funds will only buy members of the FTSE indices.

Stephen Daintith, finance director of DMGT, declared: "This change will have no impact on the approach DMGT takes to its obligations as a listed company."

But Mr de Groote suggested that it was "clearly a blow to corporate morale" and could encourage DMGT to "end the anachronistic shareholding structure".

He also pointed out the "paradox" that while DMGT faces being dropped from the FTSE 250, the smaller financial information group Euromoney Institutional Investor, in which it holds a 67 per cent stake, will still be in the FTSE 250.