Rothermere closes in on DMGT as large investor supports bid

Lord Rothermere is within reach of taking the publisher of the Daily Mail newspaper private after the company’s largest independent shareholder showed support for his takeover bid.

Nick Train, co-founder of Lindsell Train, said the offer for Daily Mail and General Trust from the great grandson of the newspaper’s founder had “a definite appeal”.

The comments from Train, one of the City’s highest profile fund managers, came a day before a deadline for shareholders to accept the bid, made via a family investment vehicle of Jonathan Harmsworth, Viscount Rothermere.

Lindsell Train holds a stake of about 13 per cent in DMGT, through the Finsbury Growth & Income Trust and other funds. The holding makes Lindsell Train DMGT’s largest non-family shareholder, according to Capital IQ data.

Other investors have complained that the Rothermeres, DMGT’s controlling shareholders, are trying to take over the publisher of the UK’s bestselling daily newspaper too cheaply. This month the family increased its bid by £35m in an attempt to secure their support.

Despite the sweetened offer, Majedie Asset Management, which has a 4.5 per cent stake, said it would still “strongly urge” other shareholders not to accept it.

Most shareholders are yet to declare their voting intention, but the support from Train puts Harmsworth close to getting the deal over the line.

Harmsworth needs to secure 50 per cent support to delist the media company. DMGT said this month that shareholders with a combined stake of almost 42 per cent — mostly accounted for by the Rothermeres — were backing the plan.

In annual results for Finsbury Growth & Income on Wednesday, Train wrote that DMGT “has always fascinated me as a collection of media and data assets, evidently very undervalued by other investors”. 

He added: “The prospect of that value being crystallised by an offer at an all-time high for the share price has a definite appeal.”

Lindsell Train said the same remarks also applied to the manager’s other portfolios that hold DMGT.

Some shareholders have been critical about how the family has sought to take control. Majedie has called on DMGT’s independent directors to publish a valuation that led them to recommend the bid.

J O Hambro Capital Management also attacked the first offer as “neither fair nor supportable”.

Investors who are unwilling to sell will be offered shares in the resulting private company, which several fund managers have acknowledged they are reluctant or unable to accept.

The Rothermeres this month said their offer of 270p a share for DMGT, whose publications also include Metro and the i, was “final”. Excluding dividends, it gave DMGT an enterprise value of £885m at the time the offer was made.

Shareholders will also be in line for a special dividend, comprising 568p a share in cash and an equity interest in Cazoo, the recently listed online car retailer.