Disposal of Northcliffe to Local World

Released : 21/11/2012

DMGT agrees to sell Northcliffe to Local World, creating a new force in regional media

* DMGT to receive £52.5m cash and shares amounting to a 38.7% stake in new

media group

* The Iliffe Family, Trinity Mirror and financial investors take remaining

stakes * New group to comprise more than 107 newspapers and 60 local content websites * David Montgomery and Steve Auckland to lead new venture 21 November 2012, London: Daily Mail and General Trust plc (DMGT.L) today announced that it has reached agreement to sell Northcliffe Media, its regional newspaper business, to Local World, a newly-formed media group that will combine the Northcliffe titles with those of Iliffe News & Media Limited. DMGT will receive consideration of £52.5m in cash and a 38.7% shareholding in Local World, which will allow DMGT to benefit from the potential upside from the evolution of the regional newspaper industry. Local World will have an enterprise value of c.£100m at completion. The Iliffe family, owners of Yattendon Group, will sell Iliffe News & Media to Local World in exchange for a 21.3% shareholding in the new business. Trinity Mirror will acquire a 20% shareholding in Local World and the remaining Local World shares will be purchased by other investors including Artefact Group, an Investment Fund associated with Lord Ashcroft, and Odey Asset Management. Local World will become one of the UK's leading regional newspaper publishers, online content providers and local advertising platforms, with more than 107 print titles and 60 websites. DMGT will contribute more than 80 titles to the new venture, with another 36 coming from Iliffe News & Media. Steve Auckland, currently Chief Executive of Northcliffe, will become CEO of Local World. Rachel Addison, Group Finance Director of Northcliffe, will assume the same role at the new company alongside a board of directors drawn from the main shareholders. The company will be chaired by David Montgomery.

Auckland said: "Local World will be a comprehensive local content provider, offering the best and most trusted source of news, views and advertising in print, online and mobile, to its local audiences in the UK. The new company will be well-resourced, entrepreneurial, and able to respond quickly to the differing requirements of local communities."

Local World, with a combined weekly newspaper audience of 6 million readers and 7 million online users, aims to revitalise local media by offering fully integrated print and digital media services that focus on relevant content, advertising and local services across the UK.

Local World will comprise:

* 63 local portal websites; * 16 daily titles; * 36 paid weekly titles * 40 free weekly titles; and

* two Metro franchises and a number of niche products including magazines.

The enlarged regional media company is expected to employ more than 2,800 people, with pro forma combined operating profits of £21 million on revenues of £273 million for the year to 30 September 2011.

Local World has committed to investments in innovative information technology systems to help advertisers target digital audiences. It is developing a portfolio of commercial products for small and medium sized advertisers and plans intensive training for editorial and commercial staff to develop digital services for local users. Martin Morgan, Chief Executive of DMGT, said: "This is good news for DMGT, for all who work at Northcliffe and for the future of local news media. With this move we receive cash from the sale and also retain a stake in a business with excellent prospects. Local World has talented people and a clear vision for the future of local media. I think the media industry has been waiting for this logical next step for regional newspapers."

Transaction highlights

* Northcliffe Media comprises the regional newspaper and digital media

business within the DMGT group, operating from 23 publishing centres across

the UK;

* On completion, DMGT will receive £52.5m in cash and shares in Local World

equal to 38.7% of the equity, which will allow DMGT to benefit from the potential upside from the evolution of the regional newspaper industry; * Local World will have an enterprise value of c.£100m at completion;

* For the financial year ended 30 September 2011, Northcliffe Media had gross

assets of £32m and made an operating profit of £17m;

* Part of the cash consideration will be contributed to DMGT group pension

funds, with the remainder being used for acquisitions in line with DMGT's

acquisition strategy;

* The DMGT group will provide services to Local World on a transitional basis

for a limited period to facilitate a smooth transition of the business;

* Northcliffe Media will be consulting with its employees who are affected by

the disposal and the transaction is expected to complete around the end of

the year after the necessary consultation procedures have taken place.

DMGT will issue further information about current trading when it issues preliminary earnings for the financial year ending 30 September 2012 on 22 November 2012.

Further details on the Local World can be found at www.local-world.co.uk.

Lazard & Co., Limited is acting as sole financial adviser to DMGT in relation to the transaction.

For further information DMGT

For analyst and institutional enquiries:

Stephen Daintith, Finance Director, DMGT +44 20 3615 2902 Adam Webster, Head of Management Information and Investor Relations, DMGT +44 20 3615 2903

For media enquiries:

Kim Fletcher / Will Carnwath, Brunswick Group LLP +44 20 7404 5959

Local World +44 20 7400 1450

For analyst and institutional enquiries:

David Montgomery Steve Auckland Karen Wall For media enquiries:

Elly Williamson, M:Communications +44 20 7920 2339

Notes to Editors

DMGT will have two Directors on the Board of Local World. They will be:

* Kevin Beatty, Chief Executive Officer, A&N Media * Adrian Perry, Deputy Finance Director, DMGT Plc

About DMGT:

DMGT is an international group quoted on the London Stock Exchange with a portfolio of market-leading digital, information, media and events businesses.

Group revenues are split broadly equally across the B2B and Consumer businesses. The B2B business comprises: * Risk Management Solutions * dmg::information * dmg::events * Euromoney Institutional Investor

The Consumer business, known as A&N Media, comprises:

* The Daily Mail, The Mail On Sunday and MailOnline * Metro * Evenbase (Jobsite & Jobrapido) * Zoopla Property Group (Zoopla & Prime Location)

DMGT seeks out innovative solutions to customers' demands for information and supports a diverse group of high quality, entrepreneurial, media and information assets.

DMGT's ambition is to provide the highest quality content and services, across the most attractive growth markets in innovative, responsible and sustainable ways, building on its track record of earnings and dividend growth.

About Yattendon Group

Iliffe News & Media (INML), is a wholly owned subsidiary of Yattendon Group Plc, a private company owned by the Iliffe family. The Group is made up of four principal operating businesses covering a range of sectors including local media, agriculture, property and marine leisure. It has operations in the UK, Europe and Canada. Important notice Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for DMGT and no one else in connection with the sale of Northcliffe by DMGT and will not be responsible to any other person for providing the protections afforded to clients of Lazard & Co., Limited or for providing advice in relation to the sale of Northcliffe by DMGT or the other matters described in this announcement. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with any statement contained herein or otherwise.

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