News Corporation goes fishing for publisher Penguin

By SCOTT REID
Published on 29/10/2012 00:00

News Corporation, owner of HarperCollins, is eyeing a substantial offer for Penguin in an attempt to scupper plans for a new book publishing giant.

The media group, whose chairman and chief executive is Rupert Murdoch, is thought to have indicated to Penguin’s owner Pearson that it would make a cash offer for the publisher, which accounts for around 12 per cent of British book sales. The reported interest comes as the owners of Penguin and Random House, two of the world’s “big six” publishers, continue talks over a combination that would create a business worth some £2.4 billion.

Germany’s Bertelsmann, which owns Fifty Shades of Grey publisher Random House, will hold 60 per cent of the new business if the deal with Pearson goes through.

The tie-up would have an estimated 30 per cent share of English-language book sales, compared with 20 per cent for a HarperCollins and Penguin tie-up.

Pearson, which also owns the Financial Times, said on Thursday it had not reached an agreement with Bertelsmann and that there was no certainty of a deal.

The combined company would be home to writers as diverse as Jack Reacher creator Lee Child at Random House and Penguin’s long list of classical authors such as Jane Austen and Charles Dickens. The other publishers in the “big six” are Hachette, Macmillan and Simon & Schuster.

Their power to set prices has been eroded by the boom in digital sales and the rise of Amazon, which reportedly controls an estimated two-thirds of American print and e-book sales.

The UK division of HarperCollins publishes some 1,000 books a year and employs 850 people in Glasgow and London.