Pearson CEO Scardino's departure could lead to FT sale

Wed Oct 3, 2012 7:40am EDT
 
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By Kate Holton

LONDON (Reuters) - Pearson Chief Executive Marjorie Scardino will step down after 16 years, potentially clearing the way for her successor at the global educational and media group to sell the Financial Times newspaper.

The first female chief executive of a FTSE 100 company had previously declared that the famous pink-paged FT title would only be sold "over my dead body". The FT Group also holds a 50 percent stake in the Economist.

She will step down at the end of the year to be replaced by John Fallon, the chief executive of Pearson's international education division since 2008.

Analysts said the choice showed where the group's priorities lie and that the 50-year-old Fallon would now have to also focus on the large education business in the United States, which has been hit by tight school budgets.

"Ms Scardino was a big fan of the FT and resisted attempts to sell the business," Ian Whittaker at Liberum said. "We see John Fallon as having no emotional commitment to the division. We value the FT Group at around 770 million pounds."

Shares in the group were down 0.6 percent, slightly underperforming a flat FTSE Index.

Both Bloomberg and Thomson Reuters have been linked with a purchase of the FT Group in the last year but analysts note that Pearson has a strong balance sheet and would only need to sell the FT if it needed the money for a large and transformational deal.

Although the FT Group has succeeded in growing digital sales and subscription revenues, a sale of the title would still fit with the group's wider strategy of moving away from volatile advertising revenues.   Continued...

 
American Marjorie Scardino gestures during a press conference, 17 October. Scardino was appointed the new Chief Executive of the Pearson media and information group. REUTERS/Stringer