Is Penguin Random House Next on Pearson’s Chopping Block?

MARCH OF THE PENGUIN? After selling two profitable—and venerable—businesses in The Financial Times and The Economist, Pearson is contemplating a sale of its 47 percent stake in Penguin Random House, the fifth-largest publisher in the world by revenue. Reuters sources say Bertelsmann, the German media conglomerate that owns the rest of Penguin, is seeking a private equity partner to fund the purchase from Pearson. It appears that it’s only a matter of time: Pearson CEO John Fallon has hinted that Penguin is already on the company’s chopping block, although a sale may not happen until 2017.

Under Fallon, Pearson has decisively shifted its focus on educational publishing. The move comes with a hefty price: the company’s stock on the London exchange has tumbled to 829 pence a share at the time of writing, down from a high of 1508 pence in the 2015 calendar year. Shares on the New York Stock Exchange have also dipped, although not quite dramatically.

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