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Update: Pearson in talks to sell Financial Times, Economist stake
[LONDON] Pearson said it's in advanced talks to sell the FT Group, which owns publications including the Financial Times newspaper and a stake in the Economist magazine.
The statement, made after Bloomberg reported this week that London-based Pearson was sounding out bidders for the iconic salmon-colored business newspaper, is the first admission that years of speculation about a disposal of the asset may result in a transaction this time. FT Group also owns FT.com and a joint venture with Russia's Vedomosti newspaper.
Pearson didn't identify the potential buyer. The Financial Times may draw interest from media companies such as German media group Axel Springer SE as well as investors in Europe, the Middle East and Asia, Bloomberg reported this week. A sale may value the FT at as much as 1 billion pounds (S$2.13 billion), people familiar with the matter have said.
"There is no certainty that the discussions will lead to a transaction," Pearson said.
Pearson shares rose 2.6 per cent at 11.25 am in London trading, valuing the company at 10.2 billion pounds.
A sale of FT Group would allow Chief Executive Officer John Fallon to focus on tackling a slowdown in the education unit weighed on by declining US college enrollments and falling textbook sales. Pearson is scheduled to report six-month results on Friday.
Pearson doesn't break out financial details for the FT Group, which is part of the professional education unit that reported 1.15 billion pounds in 2014 revenue.
First published in 1888 as a four-page newspaper, the FT's circulation reached 720,000 last year, with digital subscriptions accounting for 70 per cent of the total. In a move to make more money from online readers, the newspaper in February tweaked its paywall system, moving away from a metered model that allows readers to view a few free articles every month before requiring them to pay.
Springer is in talks to combine with German broadcaster ProSiebenSat.1 Media to strengthen their push into digital media, people familiar with the matter said earlier this month. A deal would unite Springer's Bild-Zeitung tabloid and Die Welt newspaper with the ProSieben and Sat.1 commercial TV channels.
Bloomberg LP, the parent of Bloomberg News, competes with the FT in providing financial news and information.