Pearson urged to sell the Financial Times

by Maria Esposito, Brand Republic 25-Jun-07, 09:00

LONDON - Pearson is being urged to sell the Financial Times for £700m after dropping out of the race to buy The Wall Street Journal last week, in an effort to avoid a bruising newspaper war with Rupert Murdoch, who looks set for victory in his bid for the US title.

Media analyst Lorna Tilbian and unnamed Pearson shareholders are calling on the media giant to sell the FT to avoid a circulation war with The Wall Street Journal under the likely ownership of Rupert Murdoch's News Corporation.

Tilbian said: "There is danger that Murdoch will do to the FT what his newspapers in Britain have done to their competitors. Look at what The Times has done to the Telegraph or The Sun to the Mirror."

Until last week, Pearson and General Electric were contenders to acquire The Wall Street Journal. An alliance between the two media owners would have seen General Electric's business news channel CNBC combined with the FT and Dow Jones.

However, Pearson confirmed that talks had ended last Thursday, leaving the field wide open for Murdoch to buy The Wall Street Journal's parent company Dow Jones for $5bn.

By offering to pay $60 a share for Dow Jones, which represents a premium of 65% over the company's share price, Murdoch has effectively priced other bidders out of the market.

With Pearson and GE now out of the running, News Corp is now hammering out a deal with the Dow Jones board and the Bancroft family, who own a 64% controlling stake in the company.

Negotiations hit a wall this weekend when the Bancroft family made demands to ensure the editorial independence of The Wall Street Journal. As well as asking for two seats on News Corp's board, the Bancrofts want to control a new seven-person committee that would oversee budgets and key editorial staff. The family also wants to limit Murdoch's use of The Wall Street Journal brand.

Murdoch is said to find these proposals wholly unacceptable. News Corp has so far offered the Bancrofts one seat on its board.

Comments

James Cooke - 25/06/2007

I don't trust Newscorp. Its publications often take a political or moral position, and it also has major business interests besides the business press. Perhaps the FT can make something of this, capitalising on untrusting American business readers...