Publisher Pearson has edged up 3p to 896p after analysts at UBS issued a buy note on the business following reassuring results this week from its Interactive Data Corporation subsidiary.
Pearson said last month that it might sell its 61% stake in IDC, with private equity groups including Hellman & Friedman, KKR and Permira said to be in the running. UBS estimated Pearson could receive £900m after capital gains tax payments from the disposal, adding:
The key issue for Pearson remains the use of any proceeds from the sale of IDC - we believe they could acquire e-Learning firm Skillsoft or Prisa-owned international education firm Santillana. Both would give modest upgrades, but more importantly focus attention on Pearson's long term growth prospects, helping spark a re-rating from its current 13 times 2010 earnings.
