City leans on Pearson to name Barlow successor

City pressure is building on Pearson to name an outsider to succeed Frank Barlow, the media and leisure company's beleaguered chief executive, institutional investors have told the Independent.

Unexpectedly high losses at Mindscape, Pearson's ill-starred US CD-Rom investment, was only the latest disappointment, the investors said. The company remains unfocused and its clutch of assets too diverse. "At the very least, the company should announce as soon as possible a successor to Barlow," said one large investor, as a first step toward a radical reorganisation.

Moreover, an internal successor, the preferred option for Pearson's current management, is unlikely to satisfy institutional shareholders. Among possible candidates from within the company are Greg Dyke, head of Pearson Television, and senior executives David Bell and John Makinson.

Mr Barlow's successor is scheduled to be named next year. A Pearson spokeswoman said last night: "I am sure shareholders are looking for comfort and reassurance. It remains our intention to move on the issue next May."

Senior management, including Mr Barlow, have been meeting with shareholders since the beginning of this month, and further contacts are expected until well into June. Pearson declined to comment on the substance of investors's comments, although the spokeswoman confirmed that shareholders have been asking about succession plans.

In recent months, Mr Barlow has overseen a restructuring of operating units, introducing clearer lines of management control. But the company remains what one analyst last night called "a typical conglomerate: unfocused and underperforming."

Some investors came to Mr Barlow's defence yesterday, however. "He has made a real effort to transform the company," said one. "But he has not always been able to carry his board."

Pearson has been the subject of intense speculation in recent months, as the market lay bets it would either be taken over or forced to accept radical demerger proposals. While shares have shot up in recent days, they have still underperformed those of other media companies in recent years.

News that Mindscape would post losses of up to pounds 46m this year particularly infuriated some shareholders. "It is clear that no one is taking responsibility for the disaster at Mindscape," said one.

The company has received proposals from two sets of advisers - Barings and McKinsey - laying out ways of enhancing shareholder value. These include a radical break-up plan, creating several companies out of one. Henderson Crosthwaite, the City broking firm, has calculated a breakup value of up to 900p a share, compared to last night's close of 712p.

Among the proposals is a plan to spin off the company's television interests, worth about pounds 700m. Reports over the weekend about the possible spinoff helped push the shares up 13p yesterday.

These assets - which include Thames Television, Grundy Worldwide and US-based ACI - are believed to be among the most attractive.

It is also believed that Pearson Television's Mr Dyke would be interested in seeing a separate listing for his subsidiary, and is uncomfortable with the "culture" of Pearson's head office. But a spin-off would leave Pearson holding less valuable book publishing and lesiure assets, as well as its Mindscape subsidiary.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat