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| Penguin chief: News Corp can't derail Random House deal | Penguin chief: News Corp can't derail Random House deal |
| (35 minutes later) | |
| Penguin's chief executive has ruled out accepting a counterbid from Rupert Murdoch's News Corporation, which owns rival publisher HarperCollins, saying that its venture with Bertelsmann's Random House is a done deal. | Penguin's chief executive has ruled out accepting a counterbid from Rupert Murdoch's News Corporation, which owns rival publisher HarperCollins, saying that its venture with Bertelsmann's Random House is a done deal. |
| John Makinson, who will take the role of executive chairman of the board of the new Penguin Random House, dismissed the chances of News Corp derailing the deal by making a cash offer for Penguin. | John Makinson, who will take the role of executive chairman of the board of the new Penguin Random House, dismissed the chances of News Corp derailing the deal by making a cash offer for Penguin. |
| "There isn't any sort of break clause [with Bertelsmann]," he said. "It is a signed transaction." The Penguin chief said that the board of Pearson had "exhaustively examined" all options for the business before settling on the Bertelsmann deal. | |
| He did not directly deny the question of whether this process included having previously held talks with News Corp or HarperCollins. "I'm not talking too much about that," he said. "I don't think we should talk about that, that should be something you ask Pearson." | He did not directly deny the question of whether this process included having previously held talks with News Corp or HarperCollins. "I'm not talking too much about that," he said. "I don't think we should talk about that, that should be something you ask Pearson." |
| Makinson said that the decision to strike a deal with Bertelsmann – talks started five months ago – was undertaken with the unanimous backing of the Pearson board. | Makinson said that the decision to strike a deal with Bertelsmann – talks started five months ago – was undertaken with the unanimous backing of the Pearson board. |
| "It has been a very thorough process," he said. "The board of Pearson examined [every option] exhaustively. There was a great deal of analysis of all options available to Penguin. We looked at selling, merging, buying, running it differently within Pearson. We concluded this was the best option for Pearson's shareholders and the publishing industry." | "It has been a very thorough process," he said. "The board of Pearson examined [every option] exhaustively. There was a great deal of analysis of all options available to Penguin. We looked at selling, merging, buying, running it differently within Pearson. We concluded this was the best option for Pearson's shareholders and the publishing industry." |
| Makinson dismissed the view of some analysts that Penguin Random House is likely to run into regulatory issues. "I don't think our combined market share will trigger the need for disposals – 30% is an important number," he said, referring to the acceptable market share bar set by Universal Music's takeover of EMI. | |
| "We don't expect to be north of 30%," he added. "In the round we expect to meet the regulatory criteria." He said that in a few "small discrete markets" there may be a need to "have a discussion". However, his legal advice indicates no need for significant disposals in major markets, he added. | |
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