Pearson in discussions to sell the Economist

<p>The publishing company recently sold the Financial Times.</p>

British multinational publishing and education company Pearson has confirmed that it plans to sell its 50 per cent stake in the Economist Group, which includes the Economist magazine, research company the Economist Intelligence Unit and CQ Roll Call, a US legislative information provider.

Experts have valued of the stake at an estimated £400 million.

Last week, it was announced that Pearson had also sold the Financial Times to Japanese firm Nikkei for £844 million. Pearson said that its decision for selling the financial newspaper was part of its strategy to focus on the educational sector.

A sale is not certain

While Pearson is currently carrying out discussions regarding the sale of the Economist, the company has also noted that there is no certainty that the process will lead to a sale.

A spokesman for the company said: “Pearson confirms it is in discussions with the Economist Group board and trustees regarding the potential sale of our 50 per cent share in the group. There is no certainty that this process will lead to a transaction.”

No potential buyers were named, but according to the BBC, Italy's Agnelli family has said it is in talks to increase its holding. Currently, Exor, the Agnelli family's investment arm holds a 4.72 per cent stake in the Economist Group.

On its website, the firm said that it would continue to hold a minority share in the business - this would reflect "Exor's strong commitment to the editorial independence that lies at the heart of the Economist's ethos and success". The company also noted that a deal was not certain.

Pearson acquired its 50 per cent stake in the Economist in 1957 as part of its purchase of the Financial Times. A sale would have to be approved by trustees at the Economist Group, including former minister Virginia Bottomley and Gus O’Donnell the former cabinet secretary.

Other shareholders include Cadbury, Rothschild and Schroder – these firms could also be potential buyers for the Pearson stake.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.