Pearson share price jumps after confirming Financial Times sale talks with Axel Springer in the spotlight

 
Lynsey Barber
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Pink paper to leave Pearson? (Source: Getty)

Shares in the publisher of the Financial Times, Pearson, have jumped more than two per cent following reports that it will announce the newspaper group's sale "imminently".

Pearson confirmed that it is in "advanced discussions" to sell off the FT Group.

Latest: Nikkei buys Financial Times from Pearson for £884m

In a market update, the company 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.

Reuters reports Pearson will make the announcement shortly, saying it has decided to sell the paper to "a global digital news company" citing unnamed sources.

The newspaper itself reports German publisher Axel Springer is the potential buyer, while Japanese media group Nikkei has also had discussions with Pearson.

It's the second time within a week that reports have resurfaced of the global publisher considering a sale of the pink paper.

Bloomberg earlier this week said Pearson was exploring a sale after "receiving interest from potential buyers", citing people familiar with the matter, with a price tag of up to $1bn.

Pearson, which also holds a stake in the world's largest book publisher Penguin Random House, is due to report its latest interim results tomorrow.

Speculation of a sale of the prized asset has come and gone in cycles over the years, under both current boss John Fallon and former chief Dame Marjorie Scardino.

"It is always nice to see an old friend again - which is how it feels with the return of reports that Pearson may look to sell the FT," said Panmure analyst Jonathan Helliwell earlier this week. He also pointed out that a valuation of £550m is more realistic for the newspaper alone.

The £1bn price mentioned by Bloomberg looks high to us, but it depends on whether the profitable 50 per cent stake in Economist Group is included, and the outcome of pension discussions. As a reminder, Pearson last disclosed financials for FT Group in 2013 (before it moved to a new divisional reporting structure). In FY13 FT Group reported operating profit of £55m on revenues of £449m. However, this number included Mergermarket (revenue of £108m, profit of £28m, divested in early 2014), £11m of restructuring costs at FT, and associate profits from the Economist stake (separately reported at £29m of post-tax profit).

Both Thompson Reuters and Bloomberg are also in the frame as potential buyers of the more than century-old publication.

Here's what's up for grabs, in addition to the newspaper.

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