A large shareholder of Pearson, the parent company of The Financial Times, has expressed his opposition to the company making a bid with GE for Dow Jones & Co., the parent of The Wall Street Journal, writes Alistair Osborne, the business editor of The Telegraph in London.
Schroders owns more than 4 percent of Pearson. Osborne interviewed Richard Buxton, head of British equities. Osborne wrote, “Mr Buxton said: ‘Given the firepower of Murdoch, it’s difficult to see how they can structure a deal that involves at least one other party, and possibly the Bancrofts as well, that would work.’
Asked if he would welcome Pearson putting more cash behind the FT, which analysts value at £600m-£650m, Mr Buxton said: ‘No. Most Pearson shareholders would not want them to be spending a lot of money on this deal.
“‘The most value you could get from the FT would be by selling it to Murdoch not by trying to compete with him. When you are not getting an economic value from the FT and the value is as a trophy asset if it is sold, the last thing you would want to do is pay a trophy asset multiple to buy another one [the WSJ].’
“He said there were risks that Pearson’s move ‘could be seen as an acknowledgement that the FT isn’t working in the States’.”
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