Daily Mail & General In Talks For RMS Disposal; Gets Offer From Controlling Shareholder; Stock Up
Shares of Daily Mail & General Trust Plc. (DMGT.L) were gaining around 5 percent in the early morning trading in London after the company Monday said, following a number of inquiries from third parties, that it is in discussions regarding the sale of its Insurance Risk division or RMS.
Further, Daily Mail’s controlling shareholder Rothermere Continuation Limited or RCL has indicated to the Board that, if RMS Completion and Cazoo Completion both happen, it would be prepared to make a possible cash offer to acquire the entire issued and to be issued share capital of DMGT not already owned by RCL.
Under the terms of the Possible Offer, and subject to the reservations, holders of DMGT Shares would receive 251 pence in cash for each DMGT Share.
The Possible Offer implies an enterprise value of 810 million pounds, with DMGT assuming debt with a fair value of approximately 230 million pounds, for all of the trading and investment businesses of DMGT, excluding RMS, the Cazoo Shares and the cash subject to the Special Dividend.
The Board believes the terms of the proposed sale of RMS, if completed, would realise a premium valuation for its shareholders. If the terms be agreed, completion is expected to take place in the third quarter of the calendar year 2021.
The discussions are ongoing,, but there is no certainty that it will result in a transaction.
On top of the substantial cash proceeds that would arise from the sale of RMS, DMGT will have a further major asset upon completion of the business combination of Cazoo Holdings Limited, in which DMGT currently has a c.20 percent stake, with AJAX I.
It is expected that, upon Cazoo Completion, the company will hold about 16 percent of the stock of the listed Cazoo on a fully diluted basis.
The Board has concluded that, assuming both the completion of the sale of RMS and Cazoo Completion, it would be in shareholders’ interests to distribute the value expected to be created upon the deals through a special distribution and has discussed this conclusion with its controlling shareholder, RCL.
In London, Daily Mail shares were trading at 1,090 pence, up 4.81 percent.
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