On the go:A potential takeover deal of the Daily Mail and General Trust by the Rothermeres would see a sum of approximately £400m being injected into the publisher’s pension schemes, DMGT has announced.
In a statement published on Tuesday, DMGT said that it is “close to agreeing a deal with the trustees of DMGT’s three pension schemes” and Rothermere Continuation Limited.
The deal includes other terms on top of the cash payment that have not been disclosed.
The £400m injection will be used to safeguard retirement payouts and ensure that schemes are “not adversely affected by the reorganisation process”.
The latest development paves the way for a formal takeover offer to be made by the Rothermeres — who are the company’s controlling shareholders with a 36 per cent stake in the group. DMGT’s ownership structure means that the Rothermeres control the company’s voting rights.
Three preconditions had stalled a formal offer being made, but the sale of the US listing of online car retailer Cazoo — in which DMGT held a 20 per cent stake — in August, and the disposal of RMS, the group’s disaster risk-modelling business, in September, now means that trustees’ financing safeguards remain as the final barrier.
Trustees had raised concerns that the disposal of the business would result in a less-diversified organisation, with a heavy exposure to consumer media. Following the disposals, DMGT has active interests in events, property information, and venture capital, alongside its media titles including the Daily Mail, the Mail on Sunday, Metro, The i, and New Scientist.
Discussions over an acquisition deal have protracted since an indicative £810m proposal was made in July by Jonathan Harmsworth, the Viscount Rothermere, who is a descendent of the Mail’s founder.
An extension to the deadline until November 25 has been agreed upon to allow time for the remaining pre-conditions to be waived or satisfied.
In August, the sale of RMS, which acted as a guarantor to one of DMGT’s pension schemes, triggered a sum of £60m being placed in an escrow account to service that particular plan, Pensions Expert reported.
DMGT’s defined benefit schemes are closed to new entrants. The next actuarial valuation is scheduled for March 31 2022.
