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As Scardino goes, will Pearson sell the Financial Times to Bloomberg?

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By Noel Young, Correspondent

October 3, 2012 | 4 min read

The decision by Pearson CEO Marjorie Scardino to step down after 16 years has raised speculation that the company will sell the Financial Times newspaper, the famous pink 'un, whose print and online average daily readership is 2.1 million people worldwide

Scardino quits: FT for sale?

The speculation was reported by Bloomberg news in New York. One of the companies said to be in the frame as a possible FT buyer was Bloomberg itself - although the company made no comment.

John Fallon, 50, the chief of Pearson’s international education unit since 2008 will replace Scardino, 65, from January 2013.

Scardino , who tripled Pearson’s sales in her time in office first female CEO of a major U.K. company, was made a Dame in 2003.

Scardino - who once said the newspaper would be sold "over my dead body"- has expanding Pearson’s education business and pushed digital versions of books, journals and newspapers as sales of print products slowed. Ian Whittaker, an analyst at Liberum Capital, said her departure raised questions over whether the Financial Times Group, which owns the newspaper and has a 50 percent stake in The Economist, would be sold.

“Marjorie Scardino was a big fan of the group, John Fallon has no emotional commitment,” Whittaker told Bloomberg.

Pearson’s difficulties at its U.S. education business may have been the signal for Scardino to get out “while the going is relatively good,” Whittaker said.

Another question mark is over the company's ownership of Penguin.

The company in July reported a 9.6 percent drop in first- half operating profit as income from its professional training business declined.

Pearson dropped 0.6 percent to £12.30 as of 3:36 p.m. in London, valuing the company at £10 billion . The stock had risen 2.2 percent earlier yesterday.

Liberum Capital said it values the Financial Times Group, including the stake in the Economist magazine, at about £770 million . The Economist itself has worldwide sales of 1.5 million.

Alex DeGroote, a media analyst at Panmure Gordon & Co. in London said potential buyers for the FT would be Bloomberg LP, News Corp. and Thomson Reuters .

DeGroote said “The Financial Times is worth a lot more to someone else than Pearson. With the Financial Times, it’s all about the value of the brand, and the FT is the classic trophy asset.”

Bloomberg would be an obvious buyer, he said, because it already has print operations with its Business Week magazine, while News Corp., which is splitting off its publishing holdings, could use the Financial Times as an important part for that new business, DeGroote said. Other commentators thought the only complication here was that News Corp already owns the other financial heavyweight, the Wall Street Journal.

Reuters spokesman David Crundwell and Bloomberg spokeswoman Catrin Thomas declined to comment.

Asked about the fate of the Financial Times, Fallon said in a conference call today that the newspaper is “highly valued and a very valuable part of Pearson.”

During Scardino’s time, the number of Pearson employees more than doubled to 41,520 in 2011. Sales almost tripled to £5.87 billion pounds and operating profit more than tripled to £942 million . The company’s share price has risen more than 80 percent since she became CEO- twice the rise in the Footsie.

Born in Arizona , Scardino is a graduate from the University of San Francisco’s School of Law. Prior to becoming CEO of Pearson, Scardino was CEO at the Economist Group.

UPDATE The FT tells the Drum that at the end of June, online susbcriptions at 300,000 passed the worldwide online print sale of 280,124 for the first time.

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