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August 13, 2015

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Pearson sells stake in The Economist

BRITAIN’S Pearson yesterday brought an end to its near 60-year ownership of The Economist, agreeing to sell its 50 percent stake in a deal that makes Italy’s Agnelli family the largest shareholder in the weekly title.

The 469-million-pound (US$731 million) deal had been expected after Pearson sold the Financial Times newspaper last month to Japan’s Nikkei to focus on its education business.

The Economist, a famously opinionated advocate of free markets, said the deal will be structured so as to guarantee its editorial independence.

Pearson said it will sell its stake to Exor, a holding vehicle for the Agnelli family, and to The Economist Group. To finance the deal, The Economist, founded in 1843, said it will sell the Economist building in London’s St James’s district, its home since the 1960s.

“The board’s priority was to secure the independence of the ownership of the Group and the continued editorial independence of The Economist,” said Rupert Pennant-Rea, the chairman of The Economist Group.

“The strength of the Group’s balance sheet meant we could reorganize our shares so as to reinforce our editorial independence and benefit our shareholders.”

While many publications have been convulsed by the rapid shift of both readers and advertisers online, The Economist has grown steadily in strength, targeting executives and policy-makers with authoritative stories to boast a paid circulation of 1.6 million a week.

Under the terms of the deal, Exor will pay 287 million pounds to increase its stake to 43.4 percent from 4.7 percent and The Economist Group will pay 182 million pounds to repurchase Pearson’s remaining ordinary shares.

The other shareholders will see their holdings rise due to the group buying back the remaining shares from Pearson, with Rothschild the second-biggest investor at about 27 percent.




 

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