LONDON/MILAN: Britain’s Pearson is in talks to sell its 50 percent stake in The Economist to the other shareholders of the weekly newspaper, with one, Italy’s Agnelli family, confirming it wants to increase its stake.
The move comes on the heels of Pearson’s sale of the Financial Times newspaper to Japanese media group Nikkei, announced this week as its focuses on its education business.
“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,” the company said in a statement yesterday.
Pearson did not name the potential buyers. People familiar with the matter said, however, that the group of families and staff and former staff that own the remaining 50 percent are talking to Pearson but need to raise cash to fund the deal.
Italian holding company Exor, the investment company of the Agnelli family and a major shareholder in Fiat Chrysler Automobiles, said yesterday that it was in talks about raising its stake, which stands at 4.72 percent, according to its website.
Any increased investment in The Economist Group would represent a minority shareholding and there was no certainty a deal would be concluded, it said. Fiat is a shareholder in RCS Mediagroup, which publishes newspaper Corriere della Sera.
As well as the Agnelli’s, the owners of The Economist include other European dynasties such as the Cadbury, Rothschild and Schroder families. The co-owners of the weekly publication, which had a paid circulation of 1.6 million at the end of 2014 and reported £67m in annual operating profit in June, have greater voting rights than Pearson, which holds only B shares.
Any change of ownership would need the consent of the holders of the A shares, an analyst told Reuters on Friday. It would also need to be approved by trustees who are tasked with preserving the independence of the ownership of the company and the editorial independence of the title.
Bernstein analyst Claudio Aspesi estimated the stake could be worth up to £400m, based on a multiple of 15 times its net income of £46m. Beside The Economist itself, the group operates several subsidiaries including The Economist Intelligence Unit, Economist Events and Economist Corporate Network. Reuters
