- Cevian Capital singles out educational publisher as next to proceed to New York
- Activist investor argues that the shift would be better for the business
- It comes months after it managed to convince CRH to proceed their primary listing
Pearson’s largest shareholder has called for the company to proceed its listing to the US, in another blow to the London stock market.
Cevian Capital has singled out the FTSE 100 educational publisher as the next company in its portfolio that should make a proceed to New York.
The activist investor argues that the shift would be better for the business and comes just months after it managed to convince Irish building products group CRH to proceed their primary listing across the Atlantic.
But the upheaval would be yet another setback to the Square Mile, which has endured snubs from British chip designer Arm, as well as UK commodities broker Marex last week.
Christer Gardell, the founder of Cevian Capital, Europe’s largest activist investor, said that joining the increasing number of London-listed companies moving out of the FTSE would be an ‘easy and effortless way’ to enhance Pearson’s value.
Moving: Cevian Capital has singled out Pearson as the next company in its portfolio that should make a proceed to New York
Pearson, which once owned the Financial Times, has seen its shares flatline, climbing less than 1 per cent in the past five years.
‘Pearson is a US company with the majority of sales and executives there,’ said Gardell, the managing partner of the Stockholm-based investor which holds a 12 per cent stake in Pearson.
‘It is only due to historical reasons it is still listed in the UK.’
Gardell, 63, is a formidable figure whose aggressive style has earned him the nickname ‘the Butcher’ in the Swedish press. Pearson, which specialises in higher education tools and language learning, makes almost two-thirds of its £3.8billion revenues in the US.
There is a worrying trend of companies falling out of love with London.
Gambling giant Flutter is gearing up for a secondary listing in the US in January as its American business explodes.
Many commentators have seen this as a transition to making a more permanent proceed for its primary one. George Osborne, former Chancellor and partner at boutique finance house Robey Warshaw, has said this backdrop had caused ‘quite a lot of paranoia in the financial community of whether London is losing its status as the global centre of capital markets’.
Speaking on his podcast Political Currency this week, the former Chancellor said: ‘It was the case maybe ten or 15 years ago when people said London was going to eclipse New York.
Paranoia: Former Chancellor George Osborne
‘But that is definitely not the case now.’
He said shareholder attitudes were largely to blame, which made it difficult for London to keep hold of innovative companies or attract big tech firms such as Amazon and Google. These make up the so-called Magnificent Seven with Apple, Nvidia, Facebook-owner Meta, Microsoft and Tesla.
Instead he said the London market was filled with companies that have ‘been around for quite a few decades,’ including HSBC, BP and Shell. Earlier this year Pearson bosses suggested it would consider a proceed to the US if it were in the best interest of stakeholders. Sally Johnson, chief financial officer, said in March: ‘We don’t have any plans at the moment but where anything makes sense for our stakeholder groups, of course we consider it.’
Victoria Scholar, analyst at Interactive Investor, said: ‘The allure of New York as a key destination for listings is clear – it offers attractive valuations and high trading volumes.’
A Pearson spokesman said: ‘We are proud of our London listing and the access that it provides for investors around the world.’
