Financial information business Euromoney saw its share price drop nine per cent on Friday morning as Daily Mail and General Trust (DMGT) revealed details of its plans sell part of its stake in the company.
DMGT’s share price fell two per cent also after the company, which publishes the Daily Mail, said it plans to raise £315m from the sale of part of its shareholding.
DMGT intends to reduce its stake in Euromoney Institutional Investor from 67 per cent to 49 per cent, through the sale of 32.3m shares at 975p each.
The company first announced the plans on Thursday evening and then revealed details of the sale on Friday morning. The sale will comprise a secondary placing of 13m Euromoney shares and a buy-back by Euromoney of 19.2m of its own shares.
While DMGT’s share price fell two per cent to 776.5p on Friday morning, Euromoney’s were down nine per cent to 1,022p.
9 December 2016 @ 9:00amEuromoney Institutional Investors (ERM)
Announcing the sale on Thursday evening, new DMGT chief executive Paul Zwillenberg said: “It’s 47 years since DMGT backed an entrepreneurial, journalistic vision and launched Euromoney from the city pages of the Daily Mail newspaper.
“This new relationship is good for Euromoney and good for DMGT: Euromoney now has greater flexibility to use its own balance sheet to pursue acquisitions and accelerate its strategy.”
He said the sale is a “significant step” in the implementation of a new strategy set out by DMGT last week, when the group indicated it was conducting a portfolio review.
Ian Whittaker, a media analyst at Liberum, predicted DMGT will now look to sell more of its Euromoney stake.
DMGT stated previously it made sense to own either 100pc of Euromoney or to sell its stake. Accordingly, we believe DMGT may look to sell more of its stake in the future and use the those proceeds to fund deals in events or information.