Bertelsmann Buys 22% Stake in Penguin Random House From Pearson -- 2nd Update
11 July 2017 - 5:49PM
Dow Jones News
By Zeke Turner and Olga Cotaga
Bertelsmann SE said Tuesday it will increase its stake in book
publisher Penguin Random House to 75%, giving it tighter control
over one of the world's top book publishers.
Minority owner Pearson PLC said separately it is selling a 22%
stake in the publishing business to Bertelsmann for $1 billion and
will retain 25%.
Executives at Bertelsmann said the deal wouldn't affect Penguin
Random House's daily operations, but the privately held German
media titan said that its increased control will give it the right
to name a chairman of the company's board of directors.
"The transaction is an attractive proposition economically, as
the earnings attributable to Bertelsmann shareholders will increase
by more than EUR60 million ($68.3 million)," said Bertelsmann Chief
Executive Thomas Rabe on Tuesday.
Under the terms of Bertelsmann and Pearson's 2012 joint-venture
agreement, the German company already had control of the CEO job,
to which it appointed Bertelsmann insider Markus Dohle. Originally
Bertelsmann had just 53% of the combined company.
The sale is expected to close in September, Pearson and
Bertelsmann said, pending approval from regulators.
Penguin Random House's enterprise value for the deal had been
set at $3.55 billion, according to Bertelsmann, which was advised
by J.P. Morgan in the transaction.
The merger of Penguin and Random House joined 250 brands that
publish more than 15,000 titles annually, forming the
English-language world's top bookseller.
Bertelsmann competes with News Corp, which owns book publisher
HarperCollins, as well as Dow Jones & Co., the publisher of The
Wall Street Journal.
In January Pearson, facing falling revenue from its North
American education business, said it was issuing an exit warning to
its partner Bertelsmann aimed at shoring up its balance sheet,
which had been destabilize by losses Pearson's North American
higher-education business.
Write to Zeke Turner at Zeke.Turner@wsj.com and Olga Cotaga at
Olga.Cotaga@wsj.com
(END) Dow Jones Newswires
July 11, 2017 03:34 ET (07:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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