Daily Mail & General Trust PLC Reduction of stake in Euromoney (3752R)
09 December 2016 - 3:57AM
UK Regulatory
TIDMDMGT TIDMERM
RNS Number : 3752R
Daily Mail & General Trust PLC
08 December 2016
8 December 2016
Daily Mail and General Trust plc ("DMGT")
Reduction of stake in Euromoney Institutional Investor PLC
("Euromoney") in line with DMGT's strategic priorities
DMGT announces its intention to reduce its holding in Euromoney
to c.49%. This will be achieved by a sale of approximately 32
million ordinary shares in Euromoney (the "Sale"). The Sale will
increase the focus within DMGT's portfolio and enhance its
financial flexibility, consistent with the strategic priorities
presented on 1 December.
The Sale will comprise two parts: (i) a secondary placing of
Euromoney shares (the "Placing") and (ii) a buy-back by Euromoney
of its own shares from DMGT and the subsequent cancellation of the
bought back shares (the "Buy-back").
The Buy-back, which has been agreed between DMGT and Euromoney,
will be by means of an off-market share buy-back and is subject to
majority approval by Euromoney's independent shareholders (which
excludes DMGT). The shares to be sold in the Placing (the "Placing
Shares") and, if approved, the Buy-back (the "Bought Back Shares")
represent approximately c.10% and c.15% of Euromoney's current
issued share capital respectively. As the Bought Back Shares will
be cancelled, the combined effect of the Sale will be to reduce
DMGT's holding from c.67% of Euromoney's issued share capital to
c.49%. As a result, Euromoney will cease to be a subsidiary and
will be accounted for as an associate. Euromoney is and will remain
strategically independent of DMGT, but will gain further functional
and financial independence as a result of the Sale.
Euromoney has made significant progress executing on its revised
strategy since it was announced in March 2016, as evidenced by the
improvement from revenues declining by an underlying 6% in the
first half of FY 2016 to a 2% underlying decline in the second
half. Subscriptions, which accounted for 58% of Euromoney's
revenues in FY2016, grew by an underlying 2% in the final quarter
of the year. The Sale will result in Euromoney's balance sheet
being independent of DMGT's, increasing Euromoney's financial
flexibility to be acquisitive and to further accelerate the
implementation of its announced strategy. As a result of the Sale,
Euromoney will have a more diversified shareholder base, which is
expected to increase the liquidity in its shares. Euromoney is also
expected to benefit from material EPS accretion. Furthermore, in
conjunction with the Sale, DMGT supports Euromoney's intention to
review its dividend policy with a view to increasing its dividend
payout ratio, subject to approval by the Euromoney Board, to be
more in line with its peers.
On 1 December 2016, DMGT presented a revised strategy,
identifying three key priorities: improving operational execution,
increasing portfolio focus and enhancing DMGT's financial
flexibility. The Sale marks significant progress in both increasing
the focus within DMGT's portfolio and enhancing DMGT's financial
flexibility. Firstly, further investment in the financial sectors
that Euromoney operates in will be financed by Euromoney, without
recourse to DMGT's balance sheet. This will allow DMGT to
concentrate its investment in fewer sectors, increasing the focus
within the portfolio. Secondly, the proceeds from the Sale will
reduce DMGT's net debt, thereby enhancing DMGT's financial
flexibility and capacity to invest in market-leading positions,
both organically and through acquisitions.
Euromoney has been and continues to be a valuable investment for
DMGT. The business has market-leading products, a first-class
management team and excellent prospects. Following completion of
the Sale, DMGT will continue to be Euromoney's largest shareholder
and is actively committed to supporting Euromoney in implementing
its strategy through its representatives on the Board.
The Placing Shares are being offered by way of an accelerated
bookbuild, which will be launched immediately following this
announcement. Lazard & Co., Limited ("Lazard") is acting as
financial adviser to DMGT in connection with the Sale, and Numis
Securities Limited ("Numis") and UBS Limited ("UBS") are acting as
joint bookrunners in connection with the Placing (the
"Bookrunners").
The final number of Placing Shares to be placed and the placing
price will be agreed by the Bookrunners and DMGT at the close of
the bookbuild process. The results of the Placing will be announced
as soon as practicable thereafter. This announcement will also
include illustrative financial information for DMGT for FY 2016 to
show the results as they would have been had DMGT's holding in
Euromoney been c.49% throughout the year.
The timing of the close of the bookbuild process, pricing and
allocation are at the absolute discretion of the Bookrunners.
Euromoney's ordinary shares held by DMGT which are not sold in the
Placing will be subject to a 180-day lock-up, which will be subject
to customary exceptions and may otherwise only be waived with the
consent of the Bookrunners.
The Bought Back Shares will be sold to Euromoney at the placing
price, if the Buy-back is approved by Euromoney's independent
shareholders (which excludes DMGT).
For further information
For analyst and institutional
enquiries:
DMGT +44 (0)20 3615
Adam Webster 2903
Lazard
Nicholas Shott
Charlie Foreman +44 (0)20 7187
Philippe Noël 2000
Numis
Lorna Tilbian
Mark Lander +44 (0)20 7260
Nick Westlake 1000
UBS
Christopher Smith
Jonathan Retter +44 (0)20 7567
Alex Bloch 8000
For media enquiries:
Kim Fletcher / Simone Selzer, +44 (0)20 7404
Brunswick Group 5959
Market Abuse Regulations
As with previous announcements, the information communicated in
this announcement includes inside information. DMGT has included
this statement in this announcement in order to comply with the
Market Abuse Regulation, which came into effect on 3 July 2016.
About DMGT
DMGT manages a balanced multinational portfolio of
entrepreneurial companies, with total revenues of almost GBP2
billion, that provides a diverse range of businesses and consumers
with compelling information, analysis, insight, news and
entertainment.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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