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By Kate Holton
LONDON, July 23 (Reuters) - Japanese media group Nikkei has
agreed to buy the Financial Times from Britain's Pearson
PSON.L for $1.3 billion, putting one of the world's premier
business newspapers in the hands of a company influential at
home but little known outside Japan.
The deal, struck after Nikkei beat Germany's Axel Springer
SPRGn.DE to the prize, marks the biggest acquisition by a
Japanese media organisation and is a coup for the employee-owned
firm which lends its name to the main Japanese stock market
index.
In the Financial Times it has acquired an authoritative
global newspaper that commands strong loyalty from its readers
and has coped better than others with the shift to online
publishing. It was one of the first newspapers to successfully
charge for access to its website.
Established in 1884 and first printed on pink paper in 1893
to stand out from rivals, the FT has employed some of the
leading figures in media and politics, including Robert Thomson,
Chief Executive of News Corp NWSA.O , former British finance
minister Nigel Lawson and Ed Balls, an adviser to former British
prime minister Gordon Brown.
"I am extremely proud of teaming up with the Financial
Times, one of the most prestigious news organisations in the
world," said Tsuneo Kita, chairman and group CEO of Nikkei. "We
share the same journalistic values."
The Nikkei newspaper, which has a circulation surpassing 3
million for its morning edition alone, enjoys a must-read
reputation for financial and business news in Japan but has
struggled to break out of its home market.
The paper, with its deep ties to corporate Japan, has also
faced criticism for running earnings "previews", which are
considered to be leaks, days ahead of corporate results at a
time when Prime Minister Shinzo Abe's government has been
pushing for greater corporate transparency.
As the news broke of the Nikkei deal, an FT journalist
tweeted a photograph showing staff in their newsroom crowded
around a television watching the developments.
According to tweets from journalists who were addressed by
the paper's management, FT Editor Lionel Barber told staff the
deal "was not and is not a shotgun marriage", saying there had
been hours of conversation.
Reporters at the paper told Reuters there was some
apprehension, as they knew very little about their new owner,
but there was also relief they had not been bought by Bloomberg
- another potential buyer - which could have resulted in
duplication of staff roles and more potential job cuts.
Chief Executive John Fallon told reporters he believed that
like Pearson, the new owner had a commitment to the "fairness
and accuracy of its reporting, and to the integrity and
independence of its journalism".
BOLT FROM THE BLUE
Reuters was first to report on Thursday that the
171-year-old Pearson had finally decided to sell the business
daily as it expanded more into education, sparking speculation
as to who was the buyer.
The name of Nikkei came out of the blue. The FT itself
reported that Axel Springer, publisher of Germany's Bild and Die
Welt newspapers, was the most likely buyer.
"We were all frantically Googling Axel Springer to find out
who they were... and everybody was showing off their great
German skills. That obviously changed quite quickly," said one
person familiar with the FT newsroom.
Analysts and bankers had for years been waiting for Pearson
to sell the trophy asset, although the names most closely linked
with a deal were financial data terminal providers Bloomberg and
Thomson Reuters TRI.N , parent of Reuters news agency.
A person familiar with the situation had told Reuters in
recent weeks that Axel Springer was working on a buyout, and a
spokeswoman confirmed that the group had held talks about a
deal.
The sale of the FT Group is expected to close during the
fourth quarter of 2015 and does not include its 50 percent stake
in The Economist magazine or the London headquarters of the
newspaper on the banks of the River Thames.
"It is hard to argue with the price," said Richard Marwood,
senior fund manager at AXA Investment Managers, a shareholder in
Pearson.
Barclays said the price represented a multiple of 35 times
earnings before interest, tax and appreciation.
Pearson, founded in 1844 as a small building firm in
Yorkshire, northern England, was once one of the world's largest
building contractors and has had a long list of varied interests
from banking and publishing to owning theme parks and Madame
Tussaud's waxworks.
The sale will leave Pearson as the world leader in education
publishing and the owner of a 47 percent stake in the Penguin
Random House book publisher.