Published On: Wed, Aug 12th, 2015

Exor becomes largest The Economist investor for $447.3 million

The deal makes Italy's Agnelli family and John Elkann the largest investor in the weekly publication.

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  • Exor to acquire all of Pearson’s shares for £287 million ($447.3 million)
  • Amendments to the Group’s articles being proposed to secure editorial and company independence for the future
  • Existing shareholder stakes will increase by 25%, repurchased shares to be held in treasury
  • The purchase will be part-funded by the sale of the Economist Complex

After the sale of the Financial Times newspaper to Japan’s Nikkei, Pearson had agreed the sale of the Economist to Exor, a holding vehicle for the Italian Agnelli family, and to other existing shareholders which include the Rothschild, Cadbury, Layton, and Schroder families.

The Economist Group announced today , August 12th, that it will buy back 5.04 m ordinary shares (20% of total share capital) from Pearson plc for £182 million ($283.6 million).

Exor increased its stake from 4.7 percent to 43.4 percent for a price of 287 million pounds ($447.3 million).

“We are convinced of the huge potential that still lies ahead and particularly in The Economist’s ability to seize the many development opportunities linked to the digitisation of the media industry, ” John Elkann, the CEO of Exor and a scion of the Agnelli family, said in the statement.

The announcement added that, subject to a shareholder vote, the governance rules of The Economist would be amended to limit the voting powers of any single shareholder to 20 percent, and to ensure that no one individual or company can own more than 50 percent of the group’s shares.

Exor, is the controlling shareholder in Fiat Chrysler Automobiles , among others.

The publication, which says it targets readers including influential executives and policy-makers, had a paid circulation of 1.6 million a week at the end of 2014. In that year it contributed 21 million pounds to Pearson’s operating income and approximately 3 pence to adjusted earnings per share.

The transaction will include amendments to the Group’s articles, which will safeguard the independence of the company and crucially, the editorial independence of The Economist.

Rupert Pennant-Rea, the chairman of The Economist Group, said that the agreement will also lead to the sale of the Economist Complex, for new offices, with more space.

 

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