Could Warren Buffett Buy The Financial Times?

Published in Investing on 7 November 2012

Rumours suggest Pearson (LSE: PSON) could sell the Financial Times.

Tycoons such as Rupert Murdoch and Warren Buffett may soon have the opportunity to acquire the Financial Times, if recent reports about the newspaper's current owner prove to be accurate.

According to Bloomberg, FTSE 100 (UKX) member Pearson (LSE: PSON) (NYSE: PSO.US) may sell the Financial Times division as the group focuses more attention on its larger education businesses. 

Bloomberg cited unidentified sources close to Pearson as saying the company has "decided to consider offers for the newspaper this year".

The rumours follow the impending departure of Marjorie Scardino, who has served as Pearson's chief executive for almost 16 years, and the recent decision to merge the group's Penguin paperback subsidiary with the publishing operations of Bertelsmann.

During 2011, the Financial Times and various sister publications produced sales of £427 million and adjusted operating profits of £76 million. One of Bloomberg's mystery sources touted a potential £1 billion price tag for the subsidiary.

Potential purchasers for the Financial Times may include Rupert Murdoch, a former school newspaper editor and now chairman of News Corporation (NASDAQ: NWS.US), which bought the Wall Street Journal for $5 billion during 2007. 

However, UK regulatory hurdles -- News Corp already publishes the Times and Sun newspapers -- may prevent Mr Murdoch from completing any deal.

Warren Buffett, a former paperboy and currently boss of Berkshire Hathaway (NYSE: BRK-A.US) (NYSE: BRK-B.US), may be another interested bidder. 

Mr Buffett's conglomerate has owned a large stake in Washington Post (NYSE: WPO.US) since 1973, and has bought more than 60 newspapers, including his local Omaha World-Herald, for $342 million during the last year or so.

Whether Pearson actually sells -- and whether Rupert Murdoch or Warren Buffett actually buys -- the Financial Times remains purely speculation at present.

However, both tycoons may take a look if invited to make a bid, given the Financial Times is one of the few large newspapers to have survived the Internet and recession relatively intact.  

In the meantime, it could pay to investigate a share one of the tycoons has bought this year.

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> Maynard does not own any share mentioned in this article.

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ANuvver 07 Nov 2012 , 1:06pm

No TSCO? No comment.

pickepics 08 Nov 2012 , 12:21am

The FT has indeed remained profitable and excellent quality. The web site is superb with many useful features and free tools for investors. I don't know about the rest of the group, which includes Investors Chronicle and Money Week among others, so can't comment.

If Murdoch gets his mitts on the FT it will immediately lose one subscriber. Me. I don't like what he's done with the WSJ and won't wait around while he does it to the FT.

Buffet, on the other hand, knows how to let management get on with it when they're doing a good job. I'd rather Pearson kept hold but BH would be an acceptable alternative.

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