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The owner of the Daily Mail has agreed to an £850 million buyout by its biggest shareholder Lord Rothermere in a move that will see the group taken private after nearly a century on the stock market.
Lord Rothermere has agreed to pay 255p a share for Daily Mail and General Trust (DMGT) plus debts, up from an £810 million or 251p a share proposal first made in July.
As part of the deal, shareholders will also receive a special dividend worth 991p for each DMGT share following the recent stock market listing of used car business Cazoo, which DMGT had a stake in, and the sale of its insurance division RMS.
DMGT investors will also receive a final dividend worth 17.3p a share, with DMGT saying the total value of the offer and investor payouts comes to £12.63 a share – or just over £3 billion including debts.
It comes after DMGT and Rothermere Continuation Limited (RCL) reached agreement with trustees of the firm’s pension funds, which will see Lord Rothermere inject £412 million into the schemes.
Lord Rothermere, chairman of DMGT and director of RCL, said: “The sale of RMS and the Cazoo IPO have delivered excellent shareholder returns, but inevitably DMGT is now a considerably smaller group of businesses, with significantly greater exposure to consumer media.
“This has led RCL and the DMGT board to decide to implement a major reorganisation of the group by distributing the value created by the RMS sale and the Cazoo IPO in conjunction with the offer.”
He added: “We believe the terms of our offer to be fair, particularly bearing in mind not only the existing level of debt within DMGT at a time of increasingly difficult market conditions, but also the restrictions imposed on the operation of the business as part of the settlement with the pension trustees.”
The Rothermere family is the largest shareholder with a 36% stake in DMGT, which has been listed on the stock market since 1932.
As well as the Daily Mail and Mail on Sunday, the group also owns Metro newspapers and recently acquired The i newspaper and New Scientist.
There had been three pre-conditions of a deal with RCL – a successful stock market listing of Cazoo, the sale of RMS and a deal with pensioners.
The pensions agreement had been the final sticking point holding up a final offer after Lord Rothermere first made a takeover proposal in July, with the City takeover panel extending the bid deadline repeatedly while talks continued.
DMGT confirmed on Tuesday that Lord Rothermere was close to nearing a pensions agreement.
It said on announcing the firm offer that “all the pre-conditions are now satisfied” for a bid to be agreed.
DMGT has been offloading different divisions and stakes in other business interests for several years, including Hobsons, Genscape and Zoopla, which collectively raised £1.2 billion.