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Financial Times publisher Pearson 'in talks with Axel Springer on sale' Financial Times sold to Japanese media group Nikkei for £844m
(35 minutes later)
Pearson is in “advanced discussions” over a sale of the Financial Times, it said on Thursday, with German publishing group Axel Springer emerging as the most likely buyer. The Financial Times has been sold by Pearson to Japanese financial newspaper Nikkei in a deal said to be worth £844m.
The sale of the FT would bring to an end Pearson’s 58-year ownership of the pink-paged financial newspaper and mark a huge expansion for the Berlin-based media group whose flagship newspaper is the tabloid Bild. The sale of the British newspaper was announced on Thursday hours after Pearson confirmed that it in “advanced talks” to sell the business newspaper, which it has owned for nearly 60 years.
The FT Group, which also includes a 50% stake in the Economist, is a trophy asset but its revenues are dwarfed by Pearson’s education arm. Nikkei was confirmed as the buyer on Thursday. The sale does not include the 50% share in the Economist group or the FT’s headquarters by the River Thames in London.
The Japanese company emerged as the new owner following speculation that the buyer could be German publishing group Axel Springer initially emerging as the most likely buyer.
Nikkei is one of the largest media companies in Japan, spanning newspapers, broadcasting, magazines and digital media. The group includes flagship newspaper Nikkei, which has 3 million subscribers, English language business title Nikkei Asian Review, TV Tokyo and finance and business news channel, Nikkei CBNC.
Founded in 1876, it is 12 years older than the Financial Times and employs just over 3,000 people. The company has 54 domestic news bureaus and 36 overseas, including offices in the City of London.
John Fallon, Pearson’s chief executive, said: “Pearson has been a proud proprietor of the FT for nearly 60 years. But we’ve reached an inflection point in media, driven by the explosive growth of mobile and social. In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.
“Pearson will now be 100% focused on our global education strategy. The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally.
“Nikkei has a long and distinguished track record of quality, impartiality and reliability in its journalism and global viewpoint. The board and I are confident that the FT will continue to flourish under Nikkei’s ownership”.
Tsuneo Kita, chairman and group CEO of Nikkei, said: “I am extremely proud of teaming up with the Financial Times, one of the most prestigious news organisations in the world. Our motto of providing high-quality reporting on economic and other news, while maintaining fairness and impartiality, is very close to that of the FT. We share the same journalistic values. Together, we will strive to contribute to the development of the global economy.”
The sale of the FT would bring to an end Pearson’s 58-year ownership of the pink-paged financial newspaper. There is understood to be an agreement over editorial independence and, as part of the deal, Nikkei will make a £90m contribution to the Pearson pension fund. Pearson is primarily an educational publisher..
Related: Lionel Barber: ‘It’s adapt or die frankly and that’s what we’re doing’Related: Lionel Barber: ‘It’s adapt or die frankly and that’s what we’re doing’
Reuters first reported that the London-based FTSE 100 company had decided to sell FT Group to an unnamed global digital news company on Thursday morning. Reuters had first reported that the London-based FTSE 100 company had decided to sell FT Group to an unnamed global digital news company on Thursday morning.
The sale of the newspaper, which was first published in 1888, could net Pearson as much as £1bn.
In a statement, Pearson said: “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.In a statement, Pearson said: “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.
“A further announcement will be made if and when appropriate.”“A further announcement will be made if and when appropriate.”
Axel Springer employs 14,000 staff across several digital platforms with its biggest newspaper the flagship German tabloid Bild. Last year it made €3bn in revenues and earnings of €507m.
Some 43% of all Springer’s revenues come from outside of Germany and its ambitious chief executive Mathias Döpfner has made no secret of his desire to expand into English-speaking media.
The company launched a joint venture with Politico to launch Politico Europe last year. Two years ago it introduced paywalls to its popular newspapers. Bild, the biggest-selling German newspaper with a circulation of 2.5m, now has 250,000 digital subscribers while Die Welt has 60,000 digital-only subscribers compared with 120,000 print ones.
In an interview with Capital New York in April, Döpfner said: “These are tiny little figures compared to millions of print circulation, but we do have 250,000 digital subscribers, and [we’re] surrounded by almost all free offerings in the national segment of infotainment.”
Axel has led the move against Google and its perceived monopoly in the European Union.
Potential buyers previously linked to a move for the Financial Times also include Thomson Reuters and Bloomberg.
On his return to running his eponymous financial information company Mike Bloomberg replaced his long-time editorial chief Matt Winckler with John Micklethwait, the erudite former editor of the Economist. The appointment immediately revived rumours of a bid for the FT.
Media companies are notoriously difficult to value, especially when they are part of larger organisations. One senior banker said speculation that the FT Group could be worth as much as £1.5bn was due to the fact that “beauty is in the eye of the beholder”. Rupert Murdoch paid well above expectations, twice as much as its estimated worth at the time, when he bought Dow Jones and the Wall Street Journal for $5bn in 2007.
A recent note valued the FT at between £750m and £1bn, with the FT worth £500m and the biggest unknown the worth of the 50% stake in the Economist. One media executive called it “the real prize”. A sale of the whole unit might not trigger a change of ownership clause at the Economist.A recent note valued the FT at between £750m and £1bn, with the FT worth £500m and the biggest unknown the worth of the 50% stake in the Economist. One media executive called it “the real prize”. A sale of the whole unit might not trigger a change of ownership clause at the Economist.
One possibility would be for Pearson to negotiate a three-year joint venture which would result in the eventual sale of the FT Group.
Pearson has long been said to have been considering a sale of the title, which is edited by Lionel Barber.Pearson has long been said to have been considering a sale of the title, which is edited by Lionel Barber.
Its former chief executive Marjorie Scardino once said the paper would be sold “over my dead body”. But she has since been succeeded by John Fallon, who took up the post two years ago.Its former chief executive Marjorie Scardino once said the paper would be sold “over my dead body”. But she has since been succeeded by John Fallon, who took up the post two years ago.
After the last round of sale rumours in 2013, Fallon said the paper was “not for sale” and described the FT as a “valued and valuable part of Pearson”.After the last round of sale rumours in 2013, Fallon said the paper was “not for sale” and described the FT as a “valued and valuable part of Pearson”.
The FT Group also includes a 50% stake in the Economist.
Pearson is a world leader in educational publishing, from which it makes the bulk of its revenues. Its shares were up 3% in early trading on Thursday to 1,237p.Pearson is a world leader in educational publishing, from which it makes the bulk of its revenues. Its shares were up 3% in early trading on Thursday to 1,237p.
The FT has a global print and digital circulation of 720,000, according to the company’s latest interim results in February this year, with digital readers accounting for 70% of the paper’s total paying audience.The FT has a global print and digital circulation of 720,000, according to the company’s latest interim results in February this year, with digital readers accounting for 70% of the paper’s total paying audience.
Pearson said FT profits had tripled year on year, but the group does not break out the paper’s earnings from the wider FT Group.Pearson said FT profits had tripled year on year, but the group does not break out the paper’s earnings from the wider FT Group.
The FT Group is part of Pearson Professional which recorded adjusted operating profit of £106m last year on turnover of £1.2bn.The FT Group is part of Pearson Professional which recorded adjusted operating profit of £106m last year on turnover of £1.2bn.
In the last decade its print circulation has halved but its digital subscriber base has grown exponentially, up 21% year on year to 504,000 in the latest figures.In the last decade its print circulation has halved but its digital subscriber base has grown exponentially, up 21% year on year to 504,000 in the latest figures.
Barber, an FT veteran of 30 years’ standing, has been the paper’s editor since 2005.Barber, an FT veteran of 30 years’ standing, has been the paper’s editor since 2005.
A digital pioneer since he introduced a metered paywall on the paper’s website, he has nevertheless said there is plenty of life in the print product, unveiling a new-look paper last year.A digital pioneer since he introduced a metered paywall on the paper’s website, he has nevertheless said there is plenty of life in the print product, unveiling a new-look paper last year.
In an interview last September Barber said: “I’ve got probably one of the most privileged positions in journalism and I don’t plan to give that up any time soon.”In an interview last September Barber said: “I’ve got probably one of the most privileged positions in journalism and I don’t plan to give that up any time soon.”