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Pearson leads race for US deal

Cathy Newman
Wednesday 04 June 1997 23:02 BST
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Pearson is emerging as the frontrunner to buy Institutional Investor, a US financial magazines group, after one of the other bidders, Euromoney, the acquisitive magazine publisher and conference organiser, is thought to have pulled out of the auction.

Euromoney, which is controlled by the Daily Mail & General Trust, is understood to have quit the race to buy its US competitor after deciding the asking-price was too high.

But the cost of the business, which is owned by Walt Disney, has not deterred other bidders, and it is believed that Pearson may end up splashing out up to $200m (pounds 123m) for the group. According to sources, most offers from other bidders are expected to be in the region of $170m.

Around five companies are expected to put in second bids by next Monday. There has been widespread speculation in the US press about Pearson's challengers. Those likely to have shown an interest include the Canadian- owned Thomson Corporation and Reuters.

Pearson's new chief executive, Majorie Scardino, is herself a Texan and is known to be keen to expand in the US. Editions of the Economist and the Financial Times have already been launched in the US. A substantial acquisition would appease the City, which has been waiting impatiently for news since Ms Scardino took the helm at the beginning of the year.

Institutional Investor publishes a magazine of the same title and newsletters. It also organises business seminars and conferences. Euromoney, which as it unveiled record results last month, said it was keen to acquire, is a direct competitor. However, the City will not be surprised that the company has taken its approaches no further, as it has traditionally purchased smaller concerns.

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