A placing of 11 per cent of the tightly held newspaper empire's non-voting shares will bring new investors into the Daily Mail to Evening Standard group but analysts said it left the Harmsworth family's grip on the company undiminished.
The 10.2 million shares, worth pounds 163m at last night's closing price of 1,597.5p, are currently held by a trust set up by the late Mary Viscountess Rothermere, third wife of the second Lord Rothermere, who was father of the current chairman. An American, she brought six sons to her union with Lord Rothermere, adding a seventh, Esmond, from that marriage.
The seven are the main beneficiaries of the trust, whose largest asset by far is the Daily Mail shares. Most are US citizens aged between their thirties and fifties and currently living in America. Robert Fleming, which has advised them on the sale, declined yesterday to identify its clients.
Following the sale, which UBS and Cazenove are handling via a four-day book building exercise with about 50 institutions, Daily Mail's chairman, the third Lord Rothermere, and his family still control 56.6 per cent of the company's voting shares and just over a quarter of the non-voting stock.
Their continuing control means the newspaper group has remained in family hands continuously since Alfred Northcliffe bought the business in 1896. After he died in 1922 his brother, the first Lord Rothermere, set up the Daily Mail & General Trust as a vehicle for acquiring the paper so his brother's estate could pay death duties.
Oliver Pawle, at UBS, said there had been strong interest in the shares from institutions, many of whom have been unable up to now to acquire meaningful holdings in the tightly held stock. He expected to find eager buyers for the shares, a view backed up by Derek Terrington, media analyst at Teather & Greenwood, who said a trading statement accompanying the announcement would support the shares at close to the pounds 16.10p level at which they closed last Friday.
He said comments on improved classified advertising revenue at the national titles and at the regional Northcliffe Newspapers group were encouraging. He also expected the fall in newsprint prices witnessed across the industry since the new year to cut costs significantly.
Adrian Perry, group treasurer, said the fall in raw material costs would increase the proportion of profits coming through in the second half of the year to September. Last year the group announced profits before tax of pounds 86m, up from pounds 67m the previous year.Reuse content