Pearson selling Spanish newspaper interests

FINANCIAL Times group Pearson today denied it is falling out of love with newspaper publishing, despite shock news today that it is selling its substantial interests in Spain.

Pearson is selling its 79% stake in Recoletos, publisher of the financial daily Expansion and top-selling sports paper Marca, for €743m (£510m).

Recoletos has been a beacon of profit within Pearson's FT Group which has been weighed down by the poor performance of its flagship Financial Times publication.

The decision to sell comes five years after Pearson chief executive Marjorie Scardino took control of Recoletos to consolidate the group's interests in Spain. Scardino has since focused Pearson on expanding its US-led educational publishing and Penguin books businesses.

Scardino said the €7.20-a-share offer for the Madrid-quoted company from a management buyout team, represented a 19% premium to its current market price and Pearson would book a £140m profit on the deal.

'Recoletos's strategy in sport, lifestyle and general publications is taking it further away from the FT Group's focus on business and financial news and information,' she said. 'It is time for us to part company.'

A spokesman for Pearson said it would be 'entirely wrong' to infer the sale signalled that the group may withdraw from newspaper publishing.

Pearson shares moved 12p better to 625½p.