Thursday, January 18, 2007

Stifel Nicolaus Comments on Pearson plc (PSO) Takeover Speculation

Stifel Nicolaus comments on recent speculation, reported late yesterday by "The Business", that private equity firm Kohlberg Kravis Roberts (KKR) is looking at a potential LBO of Pearson plc (NYSE: PSO) for Ј7 billion or $13.7 billion (a 4% premium to yesterday's close).

The firm said, "Our SOTP analysis suggests the company can do better. Based on purchase price multiples involving comparable assets in recent transactions, we derive a fair value ranging from $17 at the low end to $23 at the high end. We would also note that according to the report, KKR has yet to make contact with Pearson, and thus Ј7 billion is merely a number at this point."

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