The publisher of the Daily Mail has come under pressure to increased its £850m bid to take the company private as investors called the offer “opportunistic”.
Majedie Asset Management, which has a 4.6% stake in Daily Mail & General Trust (DGMT) said the proposed offer by the Rothermere family was “substantially below” fair value.
Headed by Jonathan Harmsworth, the family last week tabled a formal offer to grab the remaining two thirds of shares in DMGT it does not own at 255p each.
Harmsworth is DGMT chairman and controlling shareholder with 36%. He has already increased his offer once from 251p in cash plus debt for each DMGT share.
An unnamed top 10 investor in the company told the Daily Telegraph newspaper: “As to whether or not the family has offered a fair price for what they are bidding for, I have a lot of sympathy with what Majedie is saying here.”
“We probably believe it isn’t, but our job to our investors is to manage the risks around us rejecting that bid and where it leaves us.”
“If we do, there is the potential that we end up in a very small illiquid, potentially even private, company with no voting rights, which is not a good outcome for our investors either.”
Harmsworth’s attempt to take DMGT’s consumer business private is part of a complex deal with a series of pre-conditions, which have now been cleared.
It involved selling the insurance risk business RMS, securing the New York listing of online used car seller Cazoo so it could distribute its 17% stake to shareholders and pumping £412m into the firm’s three pensions funds.
As part of the complex transaction, shareholders will be offered a special payment of 991p per share and a final dividend of 17.3p per share.
The collective value of the offer and payouts is worth £12.63 – or more than £3bn.
Shortly after it was announced at the beginning of the month, Majedie said: “Our appraised valuation estimate of only the largest businesses within DMGT materially exceeds double the current offer price of 255p.”
Minority shareholders have until December 16 to decide whether to accept the offer.