By Simon Zekaria
Pearson PLC on Saturday moved to swiftly complete its
transformation into an education specialist after confirming it is
in talks over the potential sale of its 50% stake in The Economist
Group.
The announcement came just days after the U.K. firm agreed a
multibillion-dollar deal to sell its Financial Times newspaper.
Responding to a story by Washington-based news organization,
Politico, the publisher said: "Pearson confirms it is in
discussions with The Economist Group Board and trustees regarding
the potential sale of our 50% share." It didn't add further
information on potential buyers involved in the talks or any time
frame.
It added, "there is no certainty that this process will lead to
a transaction."
Pearson said Thursday it would sell FT Group, which includes the
Financial Times, to Nikkei Inc. of Japan for GBP844 million ($1.32
billion).
The publisher makes most of its revenue from educational
services underpinned by its operations in North America. It has a
50% non-controlling stake in The Economist Group which publishes
The Economist, a weekly business and international news publication
with a paid circulation of 1.6 million.
The group's businesses include data research firm Economist
Intelligence Unit as well as other related assets such as The
Economist Events and The Economist Corporate Network.
The holders of The Economist Group's remaining 50% stake are a
diverse group including Cadbury, Rothschild, Schröder, other family
interests, and a number of existing and former staff.
Nonexecutive board members-- Lynn Forester de Rothschild, Evelyn
de Rothschild and John Elkann--have a "significant" number of
shares, the group says.
A sale of its Economist Group stake suggests Pearson is
jettisoning its two flagship media assets to focus on its key
education businesses in North America and emerging economies such
as Brazil and China.
The publisher's executive leadership has long faced calls to
exit from its publishing operations in a bid to focus on its global
education strategy.
Over the past few years, it has restructured its operations to
counter a slowdown in mature educational markets and boost its push
into developing markets where there is greater demand for learning
services.
Following Thursday's deal to sell the FT Group, Pearson Chief
Executive, John Fallon, said the firm had reached an "inflection
point" in the face of the rapid and competitive digitization of
media. The publisher will look to invest in its more profitable
educational operations, such as providing textbooks, digital
learning programs and English language schools, he said.
Write to Simon Zekaria at simon.zekaria@wsj.com
Access Investor Kit for Pearson Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0006776081
Access Investor Kit for Pearson Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7050151056
Subscribe to WSJ: http://online.wsj.com?mod=djnwires