Pearson Regulatory News (PSON)

1st April 2020

Pearson, the world's learning company, has today completed the sale of its remaining 25% stake in Penguin Random House for approximately $675m (£530m1) to Bertelsmann SE & Co KGaA ("Bertelsmann"). The transaction was announced on 18th December 2019 and completes Pearson's exit from the venture which, going forward, will be wholly owned by Bertelsmann. 

In our announcement in December, we stated our intention to return £350m of net proceeds to our shareholders through a share buyback programme, which we subsequently commenced in early 2020. In our trading update on 23rd March, in light of the rapidly changing environment caused by the COVID-19 pandemic, we further stated that the Board had decided it was prudent to pause the share buyback with approximately £167m of the £350m share repurchase programme completed to date.

Pearson has significant financial headroom with approximately £1bn in total liquidity immediately available from cash and our Revolving Credit Facility at the end of February 2020. Given the current circumstances, we are looking at all options to maximise our liquidity and therefore will retain the proceeds from the disposal of our 25% stake in Penguin Random House to further strengthen our short-term financial position.

John Fallon, Pearson's chief executive, said: "As our venture with Bertelsmann comes to an end, we wish our colleagues and authors in Penguin Random House every future success. While we are experiencing unprecedented times as a result of COVID-19, we are taking all precautionary measures to protect our business. Our balance sheet is strong, our net debt is relatively low, and we have good liquidity. Furthermore, the growing interest in online learning puts us in a strong position given our global leadership and investment in this area."

Notes

1 Based on $/£ exchange rates of 1.27

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