Daily Mail owner to sell insurance business for £1.4bn, clearing the way for take-private bid
Daily Mail owner DMGT has today confirmed that it will sell its risk insurance business RMS to Moody’s for £1.4bn, the first step in a bid to take the group private.
Last month it was revealed that the Rothermere family was considering a bid for a slimmed-down version of DMGT.
An £810m offer is contingent on the group both selling off RMS and the successful listing of used car firm Cazoo, as well as an agreement being reached on the firm’s three pension schemes.
The firm said that the sale would likely complete in September. It has promised investors a special dividend if both deals go ahead.
Chief executive Paul Zwillenberg said: “The sale of RMS marks another major milestone in DMGT’s transformation. It is the culmination of our strategy of investment in businesses combined with active portfolio management.
“Consistent with our objective of delivering compelling returns for our investors, we have decided that now is the right time to monetise our investment in RMS at a premium valuation.”
DMGT said it would incur costs of £210m from the sale due to obligations to RMS’ minority shareholders.
If confirmed, the Rothermere 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.