Pearson in talks to sell Financial Times newspaper

23rd July 2015, Comments 0 comments

British publisher Pearson revealed Thursday it is in "advanced" talks to sell its flagship business newspaper the Financial Times to an unnamed suitor.

"Pearson notes recent press speculation and confirms that it is in advanced discussions regarding the potential disposal of FT Group although there is no certainty that the discussions will lead to a transaction," the company said in a brief statement issued on the eve of its half-year results.

"A further announcement will be made if and when appropriate," it added following reports of the FT's potential sale to an unnamed global media organisation.

The FT Group provides a range of business news services that also include a 50-percent share of The Economist magazine and a joint venture with Russian business paper Vedomosti.

The Financial Times has a combined paid print and digital circulation of 720,000, much of which is via its popular subscriber-only website.

- Shares rise -

Following Thursday's surprise announcement, Pearson's share price rallied 2.32 percent to 1,237 pence on London's FTSE 100 index, which was 0.02-percent higher at 6,668.36 points.

Asked about the FT's appeal, Steve Schifferes, professor of financial journalism at London's City University, said: "The FT has made one of the more successful adaptations to the web, driven by its ability to sell online subscriptions based on its unique information.

"This subscription base also provides advertisers with the ability to reach high-value individuals," he told AFP.

"However, it still faces challenges from the large number of free business news websites, and its paywall may limit its future growth, compared to new web-based rivals."

Launched in 1888, the widely-respected FT business daily was purchased by Pearson in 1957.

The FT's European edition first hit the printing presses in Frankfurt in 1979. The paper is now printed all over the world, including in New York, Tokyo, Hong Kong and Dubai.

The paper has been printed on distinctive pink paper since 1893.

The website -- which now accounts for 70 percent of total circulation -- was launched in 1995.

The newspaper's digital subscriptions overtook print circulation in 2012, while mobile -- tablets and smartphones -- account for about half of traffic.

Back in February, Pearson forecast that group earnings could soar by a fifth this year, aided by cost-cutting and expanding online sales.

Earnings per share -- a key measure of company performance -- could rise to between 75 pence and 80 pence this year, compared with 66.7 pence in 2014.

Net profits slid 12.5 percent to £471 million last year on restructuring costs and adverse foreign exchange moves.

- Focus on education -

Pearson -- which has become a world leader in education publishing -- is said to want to focus on the booming sector, according to analysts.

The group, which earns 90 percent of sales from its education division, had previously denied persistent speculation that the FT was for sale.

"Rumours have been circulating for a while about a possible sale of the FT, which is not a good fit with the rest of Pearson's business, which mainly concentrates on the education sector," said Schifferes.

FT education products serve two-thirds of the world's top business schools, according to Pearson.

© 2015 AFP

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