I was definitely out of short trousers and I was starting to make my way in the City when Pearson, whose largest shareholder at that time was the Cowdray family, had amassed the most eclectic and exciting portfolio imaginable – Chateau Latour, Lazard Brothers, Penguin Books, Royal Doulton China, Alton Towers (sold to Merlin in 1998) and of course the FT! It was a share that I followed closely more out of interest rather than performance.
Then under the very influential stewardship of Dame Marjorie Scardino, the emphasis of the business turned towards education, much of it education publishing in the U.S. However Dame Marge always swore blind that the FT, when Rupert Murdoch was sniffing around the possibility of making a bid that it would be sold over her dead body! Her successor John Fallon has kept up the charade with similar dismissive retorts.
Anyway there is going to be a change of leadership at the top, with John Fallon due to leave as CEO of Pearson; so the FT’S for sale sign has gone up on Southwark Bridge and it did not take long for a satisfactory bid to be forthcoming. The government and regulators were always going to have a major say or bring influence to bear on any deal. Pre Leveson & Jeremy Hunt, the natural predator would have been the Murdoch Empire. The consolidation of the WSJ and the FT would have made sense. Today hell would have a better chance of freezing over than ‘News International’ landing the spoils. The Barclay Brothers owned Telegraph is probably happy as it is and the Guardian Media would not care to lose its political bias nor could it probably afford it. Johnston Press & Trinity Mirror have problems and commitments enough of their own. There were apparently abortive conversation with Axel Springer of Germany. However I doubt that anyone would have been prepared to match Nikkei’s rich valuation of the FT – 35x earnings against an average of 12x for most media companies – $1.3 billion of £844m million. The price only included 50% of The Economist.
As I understand it, the FT only has a modest circulation in the UK on a daily basis of 100k, though 350k globally on Saturday. However it has a massive commitment to global digital media with over 750k online subscribers. In the face of massive competition from mobile and social media Pearson felt that the FT’S future would have greater synergy linked to an international media mogul looking to expand its international news base. The NIKKEI met that criteria, though initially it appeared to be a strange bedfellow. The NIKKEI are clearly very enthusiastic to become more of an international brand, having paid a handsome premium. The excellence of the FT’S investigative journalism is unchallenged. However news comes more quickly from other wires, sources and blogs. So an innovative union makes great sense. I hope the NIKKEI is up for the challenge!