Murdoch's News Corp joins the battle to p-p-p-ick up Penguin

 

News Corporation is preparing to make a cash offer worth as much as £1bn for Pearson's Penguin Group, throwing plans to merge the major book publisher with rival Random House into disarray.

Penguin and Random House were weighing up a deal in an attempt to capitalise on the rise of the e-book and wrestle back industry leadership from technology interlopers Apple and Amazon.

Now, however, Rupert Murdoch, chairman and chef executive of media conglomerate News Corp, is said to have approached Pearson about an all-cash offer of about £1bn to buy Penguin, publisher of a party planning guide by Pippa Middleton, pictured. A deal would see Penguin combined with News Corp's existing staple of books under its ownership of publisher HarperCollins.

News of Mr Murdoch's appetite for a deal will worry Germany's Bertelsmann, which owns Fifty Shades of Grey publisher Random House. It said last week that it could join with Penguin to become a single powerhouse in a £2.4bn deal, with the German group retaining a 60 per cent stake in the combined business.

Any News Corp bid would be subject to due diligence. Either deal would also face close scrutiny from regulators. A Penguin-HarperCollins tie-up would give the publishers a market share of 20 per cent while a merger of Penguin with Random House would control nearly 30 percent of English-language book sales. The latest twist comes amid ongoing questions over the future direction of Pearson, whose long-serving boss Dame Marjorie Scardino steps down at the end of the year. She was thought to have preferred a deal with Random House, in contrast to other Pearson bosses who were keen on launching talks with News Corp.

The publishing industry has been remodelled by the launch of e-book readers such as Amazon's Kindle. Penguin's sales fell 4 per cent to £441m in the first half of this year, and

profits nearly halved to £22m because of "continued pressure on physical book retailing".

Where once publishers could set their own prices, digital book sales and the rapid rise of Amazon have eroded their powers of negotiation. Apple and several leading publishers were sued by the US Department of Justice this year for alleged collusion. Most parties agreed to settle.

Pearson and News Corp declined to comment.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there