By Tapan Panchal and Deborah Ball
LONDON-- Pearson PLC has agreed to sell its 50% stake in the
publisher of the Economist magazine to the unit's existing
shareholders for GBP469 million ($730.62 million) in cash, the
company's latest move to focus on education.
Pearson on Wednesday said it would sell 27.8% of the Economist
Group's ordinary shares and all of the B special shares to Exor
SpA, the investment vehicle of Italy's Agnelli family, for GBP287
million. The rest of its ordinary shares in the publisher will be
repurchased by the Economist Group for GBP182 million.
The disposal follows Pearson's recent sale of the FT Group,
which includes the Financial Times newspaper, to Nikkei Inc. of
Japan for GBP844 million.
Exor is run by John Elkann, an Agnelli family scion, who serves
as the vehicle's chairman and chief executive. It already holds
less than 5% of the Economist Group and, among other business
interests, controls Fiat Chrysler Automobiles.
The move to become the Economist's largest shareholder reflects
both Mr. Elkann's keen personal interest in media and his push to
further diversify Exor's holdings. Last spring, Exor sold its
interest in real estate group Cushman & Wakefield for $1.3
billion, pocketing a gain of $722 million. It then launched into a
drawn-own battle to buy reinsurance group PartnerRe Ltd, winning
control of the company last week.
But Mr. Elkann, the grandson of Gianni Agnelli, has a particular
interest in media. He sits on the board of News Corp, which owns
The Wall Street Journal. Moreover, Fiat has long owned Turin-based
daily La Stampa and the car maker also has an important stake in
the holding company that controls Corriere della Sera, Italy's
largest general-interest daily newspaper. Mr. Elkann is heavily
involved in the strategies of both companies to respond to the
downturn in the Italian media sector. Over the years, Exor has held
stakes in other publishing groups, such as Random House and Le
Monde.
In a statement, Exor pledged to respect the independence of The
Economist. The group's bylaws will be amended to limit the voting
powers of any single shareholder to just 20% and to ensure that no
individual or company can own more than 50% of the group's
shares.
Other shareholder in the Economist Group include the Cadbury and
Rothschild families, as well as existing and former staff.
As well as owning the Economist magazine, a weekly business and
international news publication with a circulation of 1.6 million,
the publisher owns data firm the Economist Intelligence Unit and CQ
Roll Call.
Pearson said it expected the deal to close in the fourth quarter
and to use the proceeds to invest in its global education
strategy.
Write to Tapan Panchal at Tapan.Panchal@wsj.com
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