Pearson in talks to sell its 50% stake in The Economist
Pearson, the UK-based education company, said that it is currently in talks to sell its 50% stake in The Economist Group – publisher of The Economist.
The company, which sold off The Financial Times to the Japanese media company Nikkei only two days ago for $1.3 billion, said:
“Pearson confirms it is in discussions with the Economist Group board and trustees regarding the potential sale of our 50 percent share in the group. There is no certainty that this process will lead to a transaction.”
No potential buyers were named. However, according to people familiar with the matter, the group of families and staff and former staff that hold the remaining 50 percent are in talks with Pearson, but would need to raise more cash to fund a potential deal.
The Economist, founded in 1843, had a paid circulation of 1.6 million at the end of 2014 and posted 67 million pounds in annual operating profit in June.
According to Reuters, a change of ownership would require the approval of those who hold A shares, which includes the Cadbury, Rothschild, Schroder and Agnelli families. These families have greater voting rights than Pearson, which currently holds B shares.
Analysts expect that these families are unlikely to approve any plans by Pearson to sell to a third party.
Pearson set to focus on its education business
The move represents a shift in business focus for the company. It has made it clear that it wants to focus primarily on its core education business.
Pearson is currently the world’s leading learning company, with 40,000 employees over 80 countries.