2nd UPDATE: Pearson Agrees To Sell IDC Stake For $2 Billion

Pearson PLC (PSON.LN) said Tuesday it has agreed to sell its 61% controlling stake in Interactive Data Corp. (IDC) to two private-equity firms, netting the U.K.-based publisher around $2 billion before tax.

Interactive Data, a financial market data provider listed in the U.S., is being bought by Silver Lake Partners and Warburg Pincus, for about $3.4 billion, after it began a preliminary review of its strategic alternatives in January.

Under the agreement, Interactive Data shareholders will receive $33.86 in cash for each share they own, a 33% premium over the closing share price on Jan. 14, the last trading day before Interactive Data announced the strategic review.

"Pearson and Interactive Data have extensive growth opportunities and ambitious expansion plans, and we believe this transaction will give both companies greater focus and opportunity to invest more in their strong market positions," Pearson Chief Executive Marjorie Scardino said in a statement.

Pearson, which publishes the Financial Times newspaper and has extensive education-publishing operations, said it will use the sale proceeds "to accelerate the expansion of its businesses, including through bolt-on acquisitions, with a particular focus on adding complementary technology and services to its international, consumer and professional education businesses." It didn't provide further details of its future plans.

Pearson has secured a "reasonable price" for its stake in Interactive Data, which is in line with market expectations, Royal Bank of Scotland analyst Paul Gooden said.

Gooden, who has a sell rating on Pearson and 865 pence target price, estimated the stake sale will be around 6% dilutive to earnings. A Pearson spokesman declined to comment on Gooden's estimates.

In 2009, Interactive Data contributed GBP484 million in sales and GBP148 million in operating profit to Pearson. After tax and minority interests, Interactive Data's contribution to Pearson's adjusted earnings was GBP55 million, or 6.8 pence a share.

The earnings dilution unnerved investors, despite Pearson's assurance that it would invest the money back into the business. At 0938 GMT, Pearson shares were down 16 pence, or 1.6%, at 1034 pence in a lower London market.

The sale, which is subject to regulatory approvals, is expected to be wrapped up by the end of the third quarter of 2010.

Two other private-equity teams--one including Kohlberg Kravis Roberts and CVC Capital Partners and the other made up of Bain Capital and Advent International, also bid for Interactive Data, according to people familiar with the matter.

-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com

(Peter Lattman And Anupreeta Das contributed to this article)

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