Apollo’s $8.5 billion approach for publisher Pearson is rejected

Pearson PSO Manuals Editor 17.72%

PLC said it rejected a takeover bid worth around £6.5 billion, or the equivalent of around $8.5 billion, from private equity giant Apollo Global Management Inc.

Pearson said Friday that the New York-based investment firm made two unsolicited approaches — one in November and another this month — that significantly undervalued the company and its future prospects.

The company said Apollo’s most recent proposal, received on Monday, was offered at 854.2 pence per share, a premium of around 41% to last Friday’s closing price. The proposal price included a recently declared dividend of 14.2 pence per share.

Earlier on Friday, Apollo said it was in the preliminary stages of evaluating a possible cash offer for Pearson, an announcement that sent shares of the education company FTSE 100 up more than 20% .

Apollo said in its statement that there can be no certainty that an offer will be made. Under UK takeover board rules, Apollo has until April 8 to announce its firm intention to make a bid or walk away.

Pearson said it believes its lifelong learning strategy will create long-term sustainable value for stakeholders.

Pearson has divested a range of media assets in recent years to focus more on the education sector, where it sells a range of products from retraining tools to standardized tests.

The London-based company agreed in 2015 to sell the Financial Times business newspaper to Japan’s Nikkei Inc. after nearly 60 years of ownership. In 2019, he agreed to sell his remaining stake in book publisher Penguin Random House to joint venture partner Bertelsmann SE of Germany.

Today, under General Manager Andy Bird, a former Walt Disney Co.

executive, Pearson is looking to modernize its business, in part by dealing directly with consumers through digital products.

One initiative has been to launch an app for students called Pearson+ which offers digital learning materials. The company hopes these new products can help offset declining sales of new physical textbooks in the United States.

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