At $1.3 Billion, Nikkei Is Paying a Lot for Financial Times


Nikkei, the Japanese media company, is taking a bold step with its purchase of The Financial Times and is receiving accolades for making the $1.3 billion deal. But the financial logic behind the deal to buy the newspaper from the British publishing company Pearson, raises questions — if cold economics are the only consideration. Nikkei paid 35 times The Financial Times’s adjusted operating income, about three times the newspaper’s worth.

Publicly traded European media companies trade at an average multiple of 12 Ebitda, or earnings before interest taxes, depreciation and amortization. One might expect a buyer to pay some sort of premium for control. But The Financial Times is being bought on a multiple around twice the size of the one that Jeff Bezos, chief executive of Amazon, paid the Graham family to secure The Washington Post in 2013. (Mr. Bezos paid an estimated 17 times Ebitda.)…

At $1.3 Billion, Nikkei Is Paying a Lot for Financial Times

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