Pearson plc (LON: PSON) shares closed roughly 20% up on Friday after the British multinational rejected a £7.0 billion ($9.16 billion) takeover proposal from Apollo Global Management Inc.
Apollo’s offer translated to 854.2 pence a share
According to Pearson, the private equity firm’s 854.2 pence a share offer significantly undervalued it. The publishing and education company said in a statement:
The offer significantly undervalued the company and its future prospects. The Board is confident that the lifelong learning strategy set out in March 2021 will create sustainable, long-term value for Pearson shareholders.
Pearson’s board has unanimously rejected the bid. Trading at a PE multiple of 37.10, PSON is now up more than 30% for the year. The consensus rating on Pearson currently is “hold”.
Pearson’s profit was up 33% in its recent fiscal year
Today’s disclosure marks the second time Pearson has rejected a proposal from Apollo, the previous one being for 800 pence a share in November.
CEO Andy Bird is committed to turning Pearson into a digital-first platform. Last year, the British company launched Pearson Plus that Bird sees as similar to Spotify. The subscription platform offers access to textbooks and related materials for $14.99 per month.
Pearson reported its preliminary full-year financial results last month. The report showed significant improvement, including a 33% YoY growth in adjusted operating profit.
The post Pearson shares closed 20% up on Friday: what fuelled the stock? appeared first on Invezz.
Source: https://invezz.com/news/2022/03/11/pearson-shares-closed-20-up-on-friday-what-fuelled-the-stock/