Monday 29 March 2021 1:10 pm

Daily Mail owner’s shares jump as it bags £1bn from Cazoo listing

Shares in the publishing group behind the Daily Mail jumped in morning trading as investors geared up for a £1bn windfall from Cazoo’s New York stock market float.

The online used-car platform, in which Daily Mail and General Trust (DMGT) holds a 20 per cent stake, this morning confirmed plans to go public in a Spac deal that values the company at $7bn (£5bn).

Read more: Cazoo confirms it will go public in merger with US SPAC

DMGT said it expected its stake to be worth $1.35bn following the listing. Shares rose as much as 10 per cent this morning, before settling up around five per cent.

The figure represents significant returns for the newspaper group, owned by Lord Rothermere, which made an original investment of £117m in Cazoo through its venture capital arm.

It is also the latest example of a successful tie-up between DMGT and Alex Chesterman, the tech entrepreneur who founded Cazoo. The London-listed media firm previously invested in his online property platform Zoopla.

“This is another great example of DMGT’s ability to identify and support disruptive early-stage businesses led by entrepreneurial management teams,” said chief executive Paul Zwillenberg.

“Our strategy gave us confidence in our portfolio and the financial flexibility to invest in Cazoo, including leading a funding round in March 2020 at a time of global uncertainty. We are delighted by the rapid progress the business has made and the capital appreciation on our £117m investment.”

Cazoo has grown rapidly since its inception two years ago and is set to secure a £5bn valuation following the listing.

Read more: Daily Mail owner acquires New Scientist magazine for £70m

The blank-cheque acquisition — the latest in a growing trend among tech firms looking to go public — will see Cazoo merge with Ajax I, a special purpose acquisition company (Spac) led by billionaire investor Daniel Och.

The deal more than doubles the car platform’s previous valuation of $2.6bn in October and will provide the firm with up to $1.6bn in new capital to fund its expansion.