The Financial Times Is Definitely For Sale: Maybe

Everything is for sale if the price is right. This …

Everything is for sale if the price is right. This maxim applies to real estate and may even apply to a substantial media asset like the Financial Times – it just depends on who is doing the talking.

According to Bloomberg Business, the newspaper’s parent company Pearson Plc is entertaining a sale after receiving interest from potential buyers.

London-based Pearson is sounding out possible bidders for the salmon-coloured newspaper, which was founded in 1888, although informants asked not to be identified because the deliberations are confidential. A sale may value the business at as much as 1 billion pounds ($1.6 billion), according to the news service.

While there is no formal process under way, the Financial Times may draw interest from media companies such as Axel Springer SE as well as investors in Europe, the Middle East and Asia, the sources said.  “It’s a classic trophy asset, it has cachet,” Alex DeGroote, an analyst at Peel Hunt, is quoted in the Bloomberg story. While DeGroote said he does see Pearson as a seller of the FT, he added that the mooted price would be “an extraordinary valuation.”

According to Politico, the Bloomberg story fails to identify a potential buyer named Bloomberg (the man) who has been privately floating the idea of a bid as far back as 2012. (He’s also floated a bid for The New York Times, though that is less likely to go up for sale.) In October 2012, he visited the FT’s London headquarters. Asked then if he would like to buy the paper, Bloomberg replied, “I buy it every day.”

Politico quotes insiders who say they think Pearson will eventually sell the FT, but they’re skeptical that a deal is now imminent. Media analysts poured cold water on the latest talk of a deal.

“We find difficult to believe that this is the right time for Pearson to sell the FT (or for management to consider a sale)…,” said analyst Claudio Aspesi at Bernstein, pointing to three reasons:

  • The company does not need the cash.
  • The FT is performing well and its prospects are — if anything — improving.
  • The newspaper has a fairly sizeable pension deficit and the trustees would most likely demand that it is paid in full.

“We have long advocated that Pearson should divest its non-educational assets, so we would have no problems with such move, but we are sceptical this will prove the right time to do it,” wrote Aspesi in a research note.

If Pearson does truly decide to put FT on the auction block, the thinking is it would naturally go to the highest bidder, in which case the anonymous “investors in Europe, the Middle East and Asia”  — may well read: China. Or Michael Bloomberg himself.

It just depends on who is doing the talking.



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