Pearson Is Running Out of Assets to Sell


Pearson’s latest sale only papers over the cracks.

Pearson, the embattled British education company, is raising about $1 billion by offloading almost half of its 47 percent stake in Penguin Random House. But its boss, John Fallon, is running out of assets to sell, and investors are doubtful he will put the proceeds to good use.

The structure of the long-awaited disposal works well for Pearson. It is selling a 22 percent stake in Penguin Random House, the publisher of “Fifty Shades of Grey,” to the co-owner Bertelsmann, a German company, lifting Bertelsmann’s stake in Penguin Random House to 75 percent. The two shareholders will then leverage up the almost debt-free business and extract a dividend that takes Pearson’s total cash proceeds to more than $1 billion — well above the implied $781 million value of the stake it is selling…

Pearson Is Running Out of Assets to Sell


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