Daily Mail Owner to Spin Off Euromoney Stake to Shareholders

(Bloomberg) -- The owner of Britain's Daily Mail newspaper will distribute its stake in the publisher of Euromoney magazine to shareholders in a move that will tie the fortunes of Chairman Lord Rothermere closer to the company.

Daily Mail investors will see some of their stock exchanged for Euromoney shares. Lord Rothermere, also known as Jonathan Harmsworth, won't take part in the switch, so his family's stake in Daily Mail & General Trust Plc will increase to 36 percent from 24 percent. He already controls the company's voting stock.

In a statement, Daily Mail said it would also pay a special dividend of 200 million pounds ($265 million) for a total distribution worth 896 million pounds, a boost for investors who've seen the value of their holding slide amid declining newspaper sales and what the company in November called “challenging” media conditions.

It's the biggest shake-up yet by Daily Mail Chief Executive Officer Paul Zwillenberg, who has sold some of the media and information-services group's wide array of assets since taking the reins in 2016.

An earlier Euromoney stake sale and the disposal of property search portal operator ZPG Plc and U.S. real estate information business EDR have raised around $1.5 billion. Daily Mail's Euromoney and ZPG stakes made up about half of the company's overall equity value.

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The former partner at the Boston Consulting Group has said he's sharpened the company's focus and strengthened the balance sheet so it can invest in future opportunities.

Daily Mail shares rose 5 percent by 10:07 a.m. in London, almost erasing their decline since Zwillenberg became CEO. Euromoney shares fell 3.9 percent.

That company “will now have a large number of shareholders who did not initially choose to be Euromoney shareholders, which may not prove to be a promising set-up for the shares,” Barclays analyst Nick Dempsey wrote in a note to clients Monday.

Euromoney CEO Andrew Rashbass said it supported DMGT's latest move, which would underline the publisher's “status as a fully independent company.” The finance-industry data, media information and events group, which runs a magazine by the same name, was founded in 1969 by a finance editor of the Daily Mail.

To contact the reporters on this story: James Ludden in New York at jludden@bloomberg.net;Thomas Seal in London at tseal@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, Thomas Pfeiffer, Kim Robert McLaughlin

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