18th Dec 2019 08:21
(Alliance News) - Pearson PLC on Wednesday said it has agreed to sell the remaining 25% stake in Penguin Random House for USD675 million, part of which will be distributed to shareholders.
In addition, the FTSE 100-listed publisher said Chief Executive John Fallon intends to retire in 2020, once a successor has been appointed. Pearson said it will consider both external and internal candidates.
"Under John's leadership Pearson has become a simpler, more digital focused business underpinned by a stronger balance sheet and better positioned to deliver a sustainable and healthy future. The Board and I are grateful for John's significant contribution," said Chair Sidney Taurel.
Turning back to Penguin, Person's stake in the book publisher will be sold to Bertelsmann SE & Co KGaA, which currently holds the other 75%.
This transaction values the Penguin venture at an enterprise value of USD3.67 billion, compared with the USD3.55 billion enterprise valuation in 2017, when Pearson sold a 22% stake in the joint venture.
The transaction is in line with Pearson's company simplification strategy, it said, and is expected to close in the first half of 2020.
With the cash, Pearson proposed a GBP350 million share buyback, which is expected to start in early 2020, it said. Shares repurchased will be cancelled.
The reminder of proceeds from Penguin stake disposal will be used for general corporate purposes, Pearson said.
"With the sale of our remaining stake to our partners, Bertelsmann, we know the company is in good hands - and we wish our colleagues and authors every future success," said Fallon.
He added: "This enables Pearson now to be completely focused on building the world's leading digital learning company, linking education to employability and skills, and reaching more learners around the world to support them through a lifetime of learning."
Pearson shares were trading 4.0% higher in London on Wednesday morning at 669.60 pence each.
By Evelina Grecenko; [email protected]
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