View from City Road: Pearson goes back into its pocket

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The Independent Online
Funny things happen to Pearson every time it hears the word multimedia. Its corporate eyes glaze over and its wallet begins to palpitate.

First came Software Toolworks, the US computer game company with whizz-bang multimedia technology for which Pearson paid more than dollars 462m earlier this year, 58 times earnings.

Now the group is off again, buying a niche computer game publisher to kick-start its nascent Pearson New Entertainment division. This is destined to carry the multimedia publishing torch in Europe, 'marketing consumer entertainment products to the 15-35 year old male market'.

Hence Pearson felt the urge to pay pounds 52.5m for a company whose earnings have declined since last year, when it both bought in some of its own shares and issued options to some of its employees at a price that valued the company at just pounds 10.6m. Overpaying. That's the Multimedia Future for you.

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