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FTSE edges higher ahead of Fed with Pearson leading the way

Discussion in 'Market News' started by Lily, Dec 17, 2015.

  1. Lily

    Lily Forum Member

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    Analysts positive on publisher, with talk it may benefit from going private

    Publisher Pearson has come under pressure recently, after a warning on profits in October and a report that UK universities had stopped buying the company’s products in a row over ebook pricing.

    But the company, which has restructured with the sale of various assets including the Financial Times, is heading the FTSE 100 risers, up 37.5p at 744.5p, following a couple of positive broker notes, one of which even suggests the company may be better off considering going private.

    Longer term, Fallon described a company which is more focused geographically and in product/service range. He also underlined the need to keep focus in the near term on improving current performance, rather than pursuing new acquisitions.

    We would like management to also consider more radical options, including a major downsizing of the business and tough decisions on capital allocation (including a possible buyback) and even taking Pearson private.Some of the options we would hope are on the table include focusing the company down substantially (possibly to just two or three countries – the US, the UK and perhaps one or two more with the most upside), and exiting businesses which – irrespective of performance – are unlikely to benefit for many years from the future adoption of technology.

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