Telefonica acquires 5% Pearson stake
Friday 25 June 1999
Pearson will sell its 50 per cent stake in Lazard Partners which owns the Lazard Brothers business in London and stakes of 7.6 per cent and 8 per cent respectively in Lazard Freres in New York and Paris to Gaz et Eau, a French quoted holding company controlled by the Lazards' chairman Michel David-Weill.
At the same time, Telefonica, which already owns 20 per cent of Pearson's Spanish publishing house Recoletos, is to buy five of the eight per cent stake Lazard holds indirectly in Pearson through the same holding company, Gaz et Eau. As well as pounds 410m in cash Pearson will receive a dividend of pounds 15m on completion of the sale. Pearson also plans to buy out Telefonica's 20 per cent stake in Recoletos, publisher of Expansion, Spain's leading business publication.
John Makinson, the finance director, said the group has high hopes for the relationship with Telefonica, which as well as being the dominant phone company in Spain and large swathes of Latin America, owns stakes in terrestrial and cable television stations including Spain's Antena Tre and Via Digital, where Recoletos is also a shareholder.
Pearson is particularly attracted, he said, by the prospects for jointly growing Internet businesses in the Spanish and Portuguese-speaking world, including the Hispanic market in the US. "Telefonica's Internet site is the biggest in the Spanish language. They are also interested in telecommunications and education, as are we."
The ending of the ties between Pearson and Lazards after 80 years had long been expected. Marjorie Scardino, the Pearson chief executive who has been selling off non core business, had made little secret of her intention to dissolve the partnership when a suitable opportunity arose.
That occurred in the wake of the decision earlier this month by the Lazard houses to simplify the complex ownership structure and bring the New York, Paris and London houses under one roof.
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