Former Evening Standard business editor and Independent editor Chris Blackhurst explains why Daily Mail and General Trust owner Lord Rothermere is taking the business private and shares his take on why Geordie Greig has left his job as Daily Mail editor.
If you had to ask someone to name a typical newspaper baron the likelihood is that they would settle on one name: Rupert Murdoch.
They might say the late Robert Maxwell. Someone unlikely to feature, certainly not immediately, would be Jonathan Harmsworth (AKA Lord Rothermere).
He’s not as publicly familiar, is not so obviously power-seeking, does not court political leaders like some. I was at the opera when Rothermere and his wife, Claudia, came in. They slipped quietly, without fuss, into their seats in front of us, just like any other couple. Other corporate chieftains would look around, and did that night, to see who was in and who they knew and to nod in their direction. Not Rothermere. He could walk into a pub and the chances are no one would know him as the proprietor of the Daily Mail, Mail on Sunday and Mail Online.
The parties held by Jonathan and Claudia at Claridge’s are spectacular affairs, but they’re notable too for just how many employees and family relations are present. Other newspaper tycoon bashes will see a far larger proportion of senior politicians and powerbrokers in attendance.
One abiding source of annoyance for the rich and famous, upset at something his newspapers or website have published, is Rothermere’s regular refusal to take up their complaint. He backs his journalists.
Contrary to speculation, the departure this week of Geordie Greig as editor of the Daily Mail is not the result of complaints from Downing Street at the paper’s recent opposition to Boris Johnson – Rothermere could not care about that, although Johnson may be delighted – but more to do with the ascendancy of digital, of Mail Online, and a desire to pare costs.
Rothermere has drafted in Richard Caccappolo, a US media executive from New York to head the company’s papers and Mail Online (replacing Kevin Beatty). Caccappolo has worked in the past with the redoubtable Mail Online editor, Martin Clarke, to drive the website.
With the previous Daily Mail editor and editor-in-chief, Paul Dacre, having gone, Greig seemed to be assured of becoming the group’s media kingpin but that hasn’t happened – suddenly, Greig found himself having to answer to Caccappolo and he has left. If anyone dominates on the editorial content side, it is Clarke.
Greig’s going, and the appointment of Mail on Sunday editor Ted Verity as editor of the Daily Mail with oversight of both titles, almost certainly paves the way for the two newspapers to merge or at least combine more closely – something Greig has always resisted.
Regarding the bigger picture, it should come as no surprise that Rothermere is choosing to take DMGT, which also publishes Metro and i, private. In truth, he has never been comfortable with the public, stock market-listed, company arena.
For decades now, newspapers have sat awkwardly with the City slickers. They like to be ahead of events and they’ve long since marked newspapers down as declining assets. When Lord Hollick ran the Express group and I was deputy editor, his frustration at the constant badgering from share analysts and fund managers was visible. No matter what Hollick did, regardless of how the rest of his empire was faring, constantly he was dogged by questions about the Daily Express and Sunday Express.
Down the years I’ve talked to many corporate bosses and among those who floated their businesses on the stock market there is one abiding theme: regret. Sure, they got their money, but it’s not the same. Running a publicly quoted company is very different from managing a private one.
They complain of having to spend an inordinate amount of time answering to number-crunchers. Everything is pretty much on show for everybody to see and pore over, and question. The business is no longer theirs, even though they may still possess a substantial stake. They’re constantly being compared to others in their sector. They may be in charge but they’re not in control. They don’t possess the same flexibility and speed, they can’t take decisions and act upon them, every move must be explained and justified. And for this, they pay a small fortune in fees to maintain the listing.
So, yes, it makes perfect sense that Rothermere wishes to remove DMGT. In order to do so and it must also say something about his burning desire to go private, he’s had to construct a complex deal. The Rothermere family’s RCL company is to pay 255p a share for DMGT plus debts, which today values the company at £850m (up from the £810m he first proposed back in July). Shareholders are also to receive a special dividend of 991p for each DMGT share they own, following the recent listing of Cazoo, the used car trader in which DMGT had a 20 per cent stake and the sale of RMS, a company specialising in providing models and software for the management of risk.
They will get as well a 17.3p final dividend from DMGT. Put all that lot together and the entire package is worth £12.63 a share or a little over £3bn.
Rothermere is buying the 64% of DMGT he and his family do not own. It does, though, seem incredibly convoluted, involving the handing over of a large amount of cash.
But the reason it is happening at all and at this precise time is because of that cash. The bid from Moody’s of £1.4bn for RMS in the summer was unexpected and it left DMGT sitting on a pile of money. That, plus the offloading of Cazoo, created a choice: either stay on the stock market as a slimmed-down, mostly newspapers, group and invest, assuming there was something they wished to buy; or return the funds to shareholders.
By choosing to pay back, Rothermere is able to link it with going private. There is a case for saying he could have broken up the group still further. Other DMGT holdings include two property data businesses, Landmark in the UK and Trepp in the US; dmg events, a business-to-business conferences and exhibitions organiser, which has been hit hard by the pandemic; and New Scientist magazine.
He could have waited and possibly realised more value. But if he’d delayed, then Mail Online would be worth even more – the price of online news businesses keeps on climbing.
He’s taking it private now, because he wants to, because he can and because he feels this is the right moment to do so.
Rothermere may prefer the quieter, more discreet, path, but in his own way he is every bit as determined, and just as ruthless, as the better-known moguls.