March 2000

( £25.26)

HSBC Newsletter: In the past 2 years, Pearson has been successfully transformed from a sprawling conglomerate to a focused publisher/TV production company. Following the acquisition of Simon & Schuster, half the groups profits now derive from the US Educational market.

Thanks to education being placed as top priority on the US political agenda, the market is undergoing a period of secular growth. Analysts believe that expansion plans for the FT title abroad and development of the brand on line through FT.com provide further growth opportunities. The majority of analysts regard this as a buy.

FT: PSON TV, the production arm of the media group that owns the FT is to buy Talkback productions, the Co. formed by Mel Smith and Grif Rhys Jones, for £62m cash.[they woudn't take a cheque!-IRW]

The deal comes in the wake of the £3.47bn acquisition of Endemol, the Dutch production co. responsible for the Big Brother game show, by Telefonica, the Spanish telecoms group[that figures!-IRW]

The price paid by PSON TV represents a revenue multiple of just under 2 times- almost double the valuation traditionally given to independent production Cos.

The deal valued PSON TV at £2.73bn.-more than 7 times revenues. Talkback reported sales of £32m in year to 31st March.