The Rothermere family is weighing up a bid to take the parent company behind the Daily Mail private following a potential sale of one of its business divisions.
In a statement yesterday Daily Mail and General Trust (DMGT) said the family, which founded the newspaper, was preparing a takeover offer that would value the slimmed-down business at £810m.
Shares in DMGT jumped nine per cent as markets opened before settling around three per cent higher.
The potential deal comes amid discussions over a potential sale of DMGT’s insurance risk division.
The media group is also preparing for a major windfall from its 20 per cent stake in Cazoo, which is set to go public through a $7bn Spac listing in the US.
The Rothermere takeover bid is contingent on both a sale of the insurance business and the successful listing of Cazoo. Both sides must also agree on liabilities relating to the company’s three pension schemes.
DMGT also said it will pay a special dividend if both deals go ahead.
If confirmed, the takeover will mark a major restructuring of the group, which owns the i and Metro as well as its flagship Daily Mail title and Mail Online.
A sale of the insurance division would mark the latest efforts by DMGT to slim down its business amid major shifts in the media sector.
The company has raised roughly £1.2bn through the sale of its stakes in Hobsons, Genscape and Zoopla, as well as the sale of its 50 per cent stake in Euromoney.
Media analyst Ian Whittaker said one possible reason for the move could be that the Rothermere family “may question why they were sharing the value of asset disposals with other shareholders and so want to lock in the value of future disposals for themselves”.
He added that a privately-held DMGT would likely sell off its property information and events business and could even spin off and list Mail Online as a separate business.
Fredrik Malmberg, managing director at investment bank GCA Altium, said: “Media businesses are under tremendous pressure to change which is costly in the short and mid-term, making forecasting and analysis for a public investor community very difficult.
“A take-private could make sense as DMGT is likely to be looking to restructure its portfolio and finding sustainable and growing business models for the consumer media assets. Both would be best done in a private environment.”
He added that the company could look to relist on the stock market “when the long-term structure of the portfolio is clearer”.
The possible takeover offer would be made through Rothermere Continuation Limited, the Jersey-based holding company that holds a controlling stake in DMGT.
The company is owned by Viscount Rothermere, whose great-grandfather founded the Daily Mail in 1896.