Pearson picks up $1bn from Penguin – but no treat for investors | Nils Pratley

The education business sold nearly half its stake in the publisher to Bertelsmann, but much of the proceeds will be reinvestedPearson is still going to own a quarter of Penguin Random House, so it’s not too late to hope that it can learn to tell a story like it is. Please, drop this bland corporate talk about “rebasing” the dividend. The cut in the offering is from 52p to 17p a share, or thereabouts, which is too severe to dress in neutral language. Pearson’s status as an investment one might wish to own for income is about to be obliterated.The shame is that Pearson’s sale of a 22% stake in PRH has been secured on terms that look respectable, at least in circumstances where there was only one possible buyer – German media group Bertelsmann, which owns 53% to Pearson’s current 47%. Pearson will collect $1bn (£778m) in cash, via a combination of the sale of the stake and a dividend, in a transaction that values PRH at about seven times its top-line earnings. That valuation feels roughly right, which is why Pearson’s shares initially rose. Related: Pearson sells slice of Penguin for $1bn Continue reading... Continue reading at 'The Guardian'

[ The Guardian | 2017-07-12 00:00:00 UTC ]

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Pearson picks up $1bn from Penguin – but no treat for investors | Nils Pratley

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