Activist investor targets Pearson board seat
ACTIVIST investor Cevian has increased its stake in Pearson to nearly 9pc, raising expectations it will push for a seat on the board of the publisher.
Europe’s largest activist investor now owns 8.46pc of the FTSE 100 com- pany, up from 7pc two weeks ago and 5.4pc in June, making it the company’s third biggest investor.
The Swedish company believes Pearson has fallen short of its potential under outgoing chief executive John Fallon, and is ripe for reform as it shifts towards digital services. Cevian is putting pressure on Pearson at a vulnerable time. It is yet to find a successor to Mr Fallon, who has overseen a 56pc fall in the share price since taking over in January 2013, to 531p on Friday, and multiple profit warnings. He has tried to focus the company on the education sector, selling off the Financial Times and Penguin, but has struggled to make enough money out of digital to make up for the slump in print publishing.
Coronavirus pushed Pearson to a £23m loss during the first half of 2020, compared to a £144m profit during the same period the year before, with revenue down 17pc. Cevian has said Mr Fallon’s successor should have a “clear track record of shareholder-value creation”, suggesting it would not back an insider in the top job.
Pearson said it was in “constructive and collaborative dialogue with Cevian”, as with other shareholders.