Daily Mail: Rothermere family considers bid to take news group private

The Rothermere family is considering making a bid to take the owner of the Daily Mail news group private.

A formal offer is dependent on the Daily Mail and General Trust selling its insurance and Cazoo financial arms.

The family founded the Daily Mail, which listed on the London stock market in 1932 and expanded into a multi-media business.

A DMGT statement said that the directors were "minded" to accept the family's offer.

Lord Rothermere is already the controlling shareholder of DMGT through a 28% stake owned by his family trust, RCL. After the sale of the financial assets, RCL would bid about £810m for the remainder of the smaller DMGT group.

DMGT said it intended to distribute the proceeds of a sale of RMS along with its cash and its stake in a listed Cazoo via a special dividend, with a cash element of about 610p.

Monday's DMGT statement said discussions to sell the insurance business were continuing, and if a deal was agreed, it could be completed in the third quarter of this year.

It is unclear which companies are interested in buying the insurance division, RMS, but the statement said DMGT had received "a number of inquiries from third parties".

In March, online car seller Cazoo Holdings, in which DMGT has a stake of around 20%, agreed to go public in New York through a merger with a blank-check acquisition company - a so-called Spac - which is expected to provide DMGT with cash and shares worth more than $1bn.

The DMGT owns the Metro and i news operations, and also Daily Mail online, one of the most visited news websites in the world. Last year, the Daily Mail eclipsed the Sun as the UK's best-selling daily newspaper.

The business traces its roots to 1896, when the Daily Mail was launched by Harold and Alfred Harmsworth.

DMGT's shake-up is the latest in a string of deals, including the sale of its education business, Hobsons, energy data operation Genscape and property website Zoopla.

Under stock market rules, Lord Rothermere now has until 9 August to make a formal offer or confirm no deal will be made.

The Daily Mail has been - arguably - the most influential newspaper in Britain for the past three decades, cowing cabinet ministers and swaying policy with punchy reporting, relentless campaigns and its claim to be the voice of a silent conservative majority.

Despite that influence, however, it is a relatively small part of Daily Mail and General Trust, the company that owns it. DMGT has a broad range of media interests, even after the rapid slimming down of recent years that has seen the sale of interests in online estate agencies and the offloading of financial information provider Euromoney. Now that slimming down will accelerate - and if the Rothermere family's bid goes through, the company's shares will be taken off the London Stock Exchange.

DMGT has received an offer for one of its largest and most valuable businesses, RMS. It provides specialist information to insurance companies. DMGT's interest in Cazoo, the online car-sales company, will be spun off via a stock market listing in the US.

Under the plan outlined this morning, the cash and shares from those two transactions will be handed back to investors, and Lord Rothermere's family company will then buy out all the other shareholders.

The big question is why Lord Rothermere wants to do this. It should be possible to return cash to shareholders and keep DMGT as a listed company.

Sources close to the DMGT camp this morning said the company had been difficult to value for public company investors and that these transactions would simplify its structure and return cash. That does not answer the question of the listing.

Big shareholders normally take companies private when they wish to avoid all the disclosure and governance requirements that come with a stock exchange listing, or have a plan for a big shift in strategy or operations that will be easier to push through once they are the sole shareholder.

Expect much speculation about whether Lord Rothermere has such a change in mind for the Daily Mail.