Pearson confirms in talks to sell its 50% stake in The Economist
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Britain鈥檚 Pearson is in talks to sell its 50 percent stake in The Economist to the other shareholders of the weekly newspaper, with one, Italy鈥檚 Agnelli family, confirming it wants to increase its stake.
The move comes on the heels of Pearson鈥檚 sale of the Financial Times newspaper to Japanese media group Nikkei, announced last week as its focuses on its education business.
鈥淧earson confirms it is in discussions with The Economist Group Board and trustees regarding the potential sale of our 50 percent share in the group,鈥 the company said in a statement on Saturday. 鈥淭here is no certainty that this process will lead to a transaction.鈥
Pearson did not name the potential buyers. People familiar with the matter said, however, that the group of families and staff and former staff that own the remaining 50 percent are talking to Pearson but need to raise cash to fund the deal.
Italian holding company Exor, the investment company of the Agnelli family and a major shareholder in Fiat Chrysler Automobiles, said it was in talks about raising its stake, which stands at 4.72 percent. Any increased investment in The Economist Group would represent a minority shareholding and there was no certainty a deal would be concluded, it said. Fiat is a shareholder in RCS Mediagroup, which publishes newspaper Corriere della Sera.
As well as the Agnelli鈥檚, the owners of The Economist include other European dynasties such as the Cadbury, Rothschild and Schroder families.
The co-owners of the weekly publication, which had a paid circulation of 1.6 million at the end of 2014 and reported 67 million pounds (US$103.9 million) in annual operating profit in June, have greater voting rights than Pearson, which holds only B shares. Any change of ownership would need the consent of the holders of the A shares.
It would also need to be approved by trustees who are tasked with preserving the independence of the ownership of the company and the editorial independence of the title.
The families were unlikely to back any plans by Pearson to sell to a third party, industry bankers said.
Bernstein analyst Claudio Aspesi estimated the stake could be worth 300-400 million pounds, based on a multiple of 15 times its net income of 46 million pounds. It is unlikely that any offer would reflect the same rich multiple that Nikkei agreed to pay for the FT.
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