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On 12 July 2021, Daily Mail and General Trust plc (DMGT) that Rothermere Continuation Limited (RCL), a Bermuda registered company owned by a trust held for the benefit of Viscount Rothermere and his immediate family (DMGT’s controlling shareholder), would be prepared to make a possible offer for the entire issued and to be issued share capital of DMGT should certain transactions complete. Pre-completion conditions to the possible offer include the sale of DMGT’s insurance risk division (RMS) and the float of Cazoo via a merger with SPAC Ajax I. DMGT owns a 20% stake in Cazoo and if the merger were to complete, DMGT would receive approximately £980m on closing. Further information on the proposed sale of RMS has not been revealed.

The possible offer would see shareholders receive £2.51 per share, valuing the group at an enterprise value of £810m. Shareholders would also be entitled to receive a special dividend comprising cash raised from the net proceeds received on RMS completion and other DMGT Group cash (approximately £6.10 per share) and non-cash assets (Cazoo shares). The potential £8.61 per share would represent a 17% discount to the closing price one day prior to the announcement, but around a 10% premium compared to the trading price prior to the market speculation since February 2021 surrounding the Cazoo SPAC.

Viscount Rothermere has slowly built up his control of DGMT. In 2013, RCL completed a £19.83m resulting in RCL having complete control of the voting shares of DGMT. Minority shareholders would therefore have no formal power to block the deal. The independent DMGT directors have indicated that the offer consideration and anticipated value of the special dividend would represent attractive value for DMGT shareholders and that they would be minded to recommend the possible RCL offer to shareholders. Should the deal progress to a firm offer, it would be the fifth P2P transaction of 2021 to involve individuals or a family office. P2P transactions appear to be a continuing trend and have represented 73% of all firm offers announced in H1 2021.  

RCL has until 9 August 2021 to announce a firm intention to make an offer or withdraw its interest.

For more on the trends and developments in the public M&A market in 2021, see our upcoming H1 2021 Market Tracker Trend Report, to be published in the coming weeks.