Viscount Rothermere today strengthened his financial hold over Daily Mail & General Trust by buying out a 29.3% voting stake belonging to family members in a £50 million transaction.
Rothermere, the chairman of DMGT, already held 59.9% of the voting shares through his own family-controlled vehicle called Rothermere Continuation Limited (RCL), and his holding has now increased to 89.2%.
RCL has given Esmond Harmsworth 1998 Settlement, a trust belonging to his relatives, 6.5 million non-voting shares in exchange for its 5.8 million voting shares — a transaction that values the voting shares at a 12.5% premium to the non-voting shares.
It means Rothermere has paid a premium of about £5 million to the Esmond Harmsworth organisation, whose new stake is worth £50 million, based on the price of the non-voting shares, which today increased by 6.5p to 776p.
Sources close to DMGT described the move as a tidying-up exercise which would make little difference to the running of the company, as RCL had de facto control before today’s deal. Rothermere is in talks with other shareholders, including family members, to buy up the remaining 10.8% of the voting shares.
DMGT, the owner of the Daily Mail and a minority shareholder in the Evening Standard, has a dual shareholding structure.
About 19.9 million voting shares are held privately and a further 374 million “ordinary” shares are listed on the stock market but carry no voting rights.
DMGT was a member of the FTSE 250 until last year when it dropped out of the index after the London Stock Exchange decided that companies with non-voting shares should no longer have a premium listing.
But this has not undermined investor sentiment as DMGT shares have soared more than 80% in the last year.
The City has welcomed DMGT’s decision to spin off its local newspaper arm, Northcliffe, and focus on core assets that include the Daily Mail and major interests in financial information, data, events and digital.
Lazard banker Nicholas Shott is advising DMGT on the buyout of the voting shares.
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