Pearson seeks sale of pounds 440m BSkyB stake

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The Independent Online
Pearson, the giant media conglomerate, has stepped up efforts to realise a gain of pounds 440m through the sale of its remaining shares in BSkyB, Rupert Murdoch's satellite company.

The shares are held through the rump of the old British Satellite Broadcasting (BSBH), and represent 14 per cent of BSkyB. The stake is worth pounds 1.5bn. Pearson's indirect stake is about 4 per cent, worth pounds 440m at Sky's current record-breaking share price. Other shareholders in BSBH are Pathe, the French media company, and Granada, Gerry Robinson's hotels and media conglomerate.

According to sources at Pearson and Granada, a team of accountants have been working on ways to wind up the BSBH holding for the past three months. Initial concerns about tax implications have now been addressed, but there are still difficulties in separating the direct and indirect holdings.

According to media analysts, Pearson is intent on realising gains during the current year in part to offset the effects of a large write-down in its controversial investment in Mindscape, the troubled US CD-Rom company. "If they can cash out of BSkyB, then they will be able to cross-account this with something else," said one leading analyst.

He added: "They could clear all this out this year, and hand over to the new man with a clean slate." Frank Barlow, the current managing director, is to step down by April next year, and a new chief executive is expected to be named, perhaps by Christmas.

Pearson sold its direct 8.5 per cent holding in BSkyB in September last year, realising pounds 492m. Had it waited until this autumn, following a strong run in BSkyB shares since early this year, the stake would have been worth pounds 1.2bn.

"It would be nice for Pearson to get another pounds 440m [from the BSBH stake]," said one analyst. "But remember, they left a lot more than than on the table when they sold their [direct] stake so early."

Neither Pathe nor Granada intends to sell its BSkyB shares once the holding company is wound up. Pearson, however, would seek to place the shares as soon as possible.

BSkyB's shares have nearly doubled since January, fuelled by the company's rising profits, receding regulatory worries and the successful renewal of a contract to broadcast Premiership matches. Analysts point out that the stock's relatively restrained free float - only about 25 per cent - has exaggerated the share price rise. A sale by Pearson of its BSBH shares could help alleviate some of the supply shortage.