Majedie Asset Management has shot down a revised offer from the Rothmere family to take the publisher of the Daily Mail private, arguing it still undervalues the business.
Last month the Rothmere family tabled a formal offer to snap up the remaining two thirds of shares in DMGT it does not own for 255p each.
Majedie, which owns 4.5% in the business, was one of several shareholders to slam the deal as being “substantially below” fair value.
On Thursday the family, which founded the Daily Mail in 1896, attempted to win over the sceptics by upping its bid to 270p a share. The latest offer values the newspaper business at £885m, including debt, up from £850m previously.
DMGT’s shares opened 3% higher at £11.02 off the back of the news, though fell back down to £10.84 at market close.
However, this did little to sweeten the deal for Majedie, which said the revised offer still represents a “significant discount” to its appraisal value of the residual DMGT businesses.
Chris Field, manager of the Majedie UK Income fund, said the fund group’s valuation is “informed by” comparative multiples for DMGT’s residual businesses “the majority of which occupy leadership positions in their respective markets”.
In addition to the Daily Mail, DMGT is also the publisher of the Metro, I and New Scientist.
Majedie has also argued that DMGT’s balance sheet investments held at book value are “materially undervalued”. These include a 1.2% stake it purchased in buy now pay later platform Zilch, which following a fundraise in November is now worth four times more than what DMGT paid for it.
‘We have a duty to our clients to seek a reasonable offer for their shareholding in DMGT,” Field said. “The asymmetry of information disadvantages the non-family shareholders and we have urged the non-conflicted directors to address this by publishing the independent valuation for the residual assets forming the basis for their recommendation of the offer to minority shareholders.
“We believe this is a reasonable request to aid minority shareholders in making an informed decision. We continue to strongly urge shareholders not to accept the offer.”
