U.S. markets closed
  • S&P 500

    -40.76 (-0.91%)
  • Dow 30

    -166.44 (-0.48%)
  • Nasdaq

    -137.96 (-0.91%)
  • Russell 2000

    +3.96 (+0.18%)
  • Crude Oil

    -0.65 (-0.90%)
  • Gold

    -2.80 (-0.16%)
  • Silver

    -0.43 (-1.90%)

    -0.0040 (-0.34%)
  • 10-Yr Bond

    +0.0390 (+2.93%)

    -0.0059 (-0.43%)

    +0.1770 (+0.16%)

    +1,050.20 (+2.23%)
  • CMC Crypto 200

    -32.05 (-2.62%)
  • FTSE 100

    -63.84 (-0.91%)
  • Nikkei 225

    +176.71 (+0.58%)

£1.4bn deal puts Rothermere a step closer to taking Daily Mail owner private

·2 min read
Daily Mail
Daily Mail

Lord Rothermere's plan to take the publisher of the Daily Mail private has moved a step closer after offloading an insurance risk business for £1.4bn.

The Daily Mail & General Trust has sold RMS to the credit ratings agency Moody's in a deal that formed one of the pre-conditions of DMGT's publishing arm changing hands.

RMS was considered the jewel in the crown of the DMGT's portfolio of companies, but the group has been forced to take action to shore up the catastrophe modelling firm's performance as growth eased.

That included drafting in the former Oracle executive Karen White as boss of RMS in 2018. She has hired staff with Silicon Valley experience to help transform RMS into a tech platform.

The cash sale of RMS is expected to be completed next month if it wins regulatory clearance in America. The funds from the transaction will be distributed to DMGT's shareholders.

Chief executive Paul Zwillenberg said the sale marked a "milestone" in the transformation of DMGT.

"[The sale] is the culmination of our strategy of investment in businesses combined with active portfolio management," he added. "Organic investment in RMS’s software, data, data analytics, models and applications has created substantial shareholder value, particularly over the last few years as the team has delivered the accelerated product development programme."

The sale forms one plank of a three-part deal that will involve the company's 16pc stake in Cazoo, a used car website that plans to list in New York this year on a generous £5bn valuation, being handed to investors.

Alex Chesterman, boss of Cazoo - Tom Stockill Photography
Alex Chesterman, boss of Cazoo - Tom Stockill Photography

Lord Rotheremere will then buy out the remaining publishing business that includes the Daily Mail, the Mail on Sunday, Metro and the i newspapers, as well as magazines such as The New Scientist.

The 53-year-old is the head of the family that founded the Mail in 1896 before listing DMGT on the stock exchange in 1932.

DMGT said last month that it expected modest annual revenue growth for RMS despite a 7pc decline for nine months to June.

The group will also be left with £210m in costs linked to RMS minority shareholders, tax charges, fees, and bonus plans for staff.

However, analysts at the ratings agency Fitch have warned that DMGT's debts risk being downgraded to junk status in the wake of the deal to weaker cash flows and profit margins.