Pearson Plc moved closer to an exit from business publishing as it announced plans to dispose of its stake in the 172-year-old Economist magazine, just days after the sale of The Financial Times newspaper.
Discussions with The Economist Group’s board and trustees are under way about a disposal of its 50 percent holding in the unit, London-based Pearson said on Saturday. The Economist was among assets that were excluded from a $1.3 billion agreement to divest the FT Group to Japan’s Nikkei Inc. in the same week.
Proceeds from a sale would give Pearson Chief Executive Officer John Fallon extra firepower to turn around the company’s education business. Pearson, the world’s largest education company, has recently lost testing contracts in the U.S. and its first-half sales stalled as demand for textbooks continued to shrink and fewer students enrolled in college.
“The market is telling them they have these very valuable business titles while education isn’t yielding very much returns,” according to Alex DeGroote, a media analyst at Peel Hunt LLP in London, who said he is skeptical about using the sale proceeds to invest in digital education or to repay debt.