DMGT to retain Northcliffe

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Friday 17 February 2006

The Board of DMGT announced on 30 November 2005 that it had been conducting a strategic review of DMGT's regional newspaper division, Northcliffe Newspapers Group Limited (`Northcliffe'). The strategic review has continued since that announcement and has encompassed: (i) the assessment of the value to DMGT of restructuring Northcliffe (including the Aim Higher initiative) and (ii) a process to establish whether greater shareholder value could be generated by a sale of Northcliffe.

The Board has now concluded the two elements of the strategic review. This has identified further significant cost and revenue opportunities, in addition to the Aim Higher programme. These further improvements are already being implemented and the Board's confidence in the prospects for Northcliffe has risen.

The Board received three offers for Northcliffe on 8th February 2006, as well as proposals to acquire parts of the business. However, the offers reflected the recent downturn in trading in the regional newspaper sector caused by the weakening of the broader UK economy. In the view of the Board, the offers did not fully reflect the long term value of the business.

Consequently, the Board has decided to retain Northcliffe. It firmly believes that Northcliffe has valuable long term franchises which will continue to play a vital role in their local communities. Having compared the value that others have put on the business with the value to DMGT of Northcliffe in a restructured format, the Board is clear that the decision to retain Northcliffe will deliver greater value to shareholders than a sale in the current trading conditions.

Enquiries:
Andrew Grant 0207 353 4200
Andrew Honnor