News Corp into Pearson

Press, 24 September 1987, Page 29

News Corp into Pearson

NZPA-Reuter London Press magnate Mr Rupert Murdoch’s News Corporation said on Tuesday it has bought 13.5 per cent of British media, financial services and industrial conglomerate Pearson Pic, whose holdings include the “Financial Times” newspaper. Mr Murdoch’s group spent some £l6O million (JNZ427.2 million) on Pearson shares, on a day which saw them rocket by £1 amid broker talk that he might be making a take-over bid. They went to £9.22 from Monday’s close at £8.12. Besides the pink-paged "Financial Times,” Pearson owns publishers Longmans and Penguin books, The “Economist" weekly newspaper, a majority of investment bank Lazards and the Royal Doulton glass and porcelain group. But sources close to Mr Murdoch’s empire said News Corporation had no intention Of bidding for Pearson — for at least 12 months — although it did see openings for co-operation. Later, News Corporation said subsidiary News International had bought 17.5 million Pearson shares on

Tuesday, in addition to 10.25 million already held by the News group. A spokesman could not say when the earlier shares were bought, but the total made a 13.5 per cent stake. News Corporation brokers, Hoare Govett, said it aimed for 14.9 per cent. News Corporation said it was in the best interests of Pearson to remain an independent entity, but News Corporation wanted to discuss possible co-operation in their common business areas. Stockbroker analysts speculated that News Corporation’s interest in co-operation might centre on Pearson’s publishing side. Analysts questioned whether Mr Murdoch could hope to add the “Financial Times” to his British media stable which includes the mass circulation "Sun” and the "London Times.”

4.9 per cent of Pearson earlier this year, has not disclosed his plans. But his stake could give him a voice in any dismemberment of the group, and make News Corporation a bigger force in publishing if it is ever able to buy the Longman and Penguin units. Market sources speculated that Murdoch’s purchase might in time lead to some attempt to carve up the company. Pearson director, Mr Michel David-Weill, head of Lazard Freres and Company in New York, and Italian businessman, Mr Carlo De Benedetti, are both minority shareholders in Pearson and might participate, analysts said. Mr David-Weill may want to influence the ultimate ownership of the merchant banking Lazard operations in London, New York and Paris.