The Daily Mail and General Trust will return its stake in Euromoney and pay out a £200m cash sum to select DMGT shareholders, with Lord Rothermere set to increase his stake in the Mail and Metro publisher as a result.
DMGT plans to return its 49 per cent stake in business and finance publisher Euromoney, worth £696m, to focus on its portfolio and maintain financial flexibility, according to chief executive Paul Zwillenberg.
In its report announcing the “proposed distributions” move, DMGT said its shareholders currently hold interests in the Euromoney shares indirectly via DMGT, but will now hold them directly.
Lord Rothermere’s holding in DMGT – through companies Rothermere Continuation Limited and Rothermere Investments Limited – will increase from 24 per cent to 36 per cent following the move.
They will not participate in the £200m share return and “limit their receipt” of the cash payout, DMGT has said, with Rothermere shareholders expected to receive £17m.
The increased Rothermere stake will be the result of some DMGT shareholders taking up discounted Euromoney shares and having their stakes in DMGT reduced by a similar value, reducing the number of DMGT shares available overall.
DMGT revealed its proposal yesterday, little more than a week after it confirmed it was “reviewing options” for its stake in Euromoney.
Zwillenberg said the proposals “are fully aligned with our strategic priorities of increasing the focus of our portfolio and maintaining financial flexibility, whilst at the same time improving the efficiency of our balance sheet.
“In total, the distributions will result in almost £900m of assets being returned to shareholders, who will benefit from direct ownership of Euromoney while retaining exposure to a simplified DMGT Group.”
Euromoney chief executive Andrew Rashbass said: “Euromoney supports DMGT’s proposal.
“The proposed distribution would result in a more diversified shareholder base for Euromoney and we would expect it to result in increased liquidity in our shares.
“This should benefit both existing shareholders and those joining the register as a result of the proposed distribution. It will also underline Euromoney’s status as a fully independent company.”
DMGT cut its stake in FTSE 250 firm Euromoney from 67 per cent to around 49 per cent in December 2016. It has held a stake in the publisher for the last 50 years, dating back to Euromoney’s creation in 1969.
DMGT’s share price has risen by just over 4 per cent following its announcement, while the share price of Euromoney has fallen by about the same amount.
Picture: Reuters/Toby Melville