Pearson and Bertelsmann to merge Penguin Books with Random House

British media and education group Pearson Plc (LON:PSON) and German media major Bertelsmann AG (FRA:BTG4) said they had inked an accord to form a joint venture through the amalgamation of their respective English language publishing businesses Penguin Group and Random House Group Ltd.

The deal has to obtain clearances, including regulatory green light, and is seen to be wrapped up in the second half of next year.

Bertelsmann will hold a 53% stake in the venture, which will be dubbed Penguin Random House, with Pearson owning the remaining 47%. The parties are not allowed to offload holdings in the joint venture for three years after finalisation and each of them may require a floatation beginning five years after close. Bertelsmann’s German trade publishing operations are outside the scope of the deal. In addition, Pearson will retain rights on the Penguin brand for the global education markets.

Penguin Random House’s board will consist of five directors picked by Bertelsmann and four by Pearson. The board will be chaired by Penguin’s CEO John Makinson and Random House’s CEO Markus Dohle will lead the new firm in the capacity of CEO.

According to the companies, the transaction will bring together complementary competences, resulting in a boosted platform and enhanced resources to invest in rich content, new digital publishing models and high-growth emerging markets. Random House has a leading position in the US and the UK, while Penguin boasts a robust footprint in developing countries with fast-growth potential, the companies note.

The parties expect to realise synergies from sharing warehousing, distribution, printing, central functions and other resources. In addition, Pearson and Bertelsmann expect the combination to allow for higher organic investment in authors and new product models than the collective investment of the publishing businesses were they to operate independently.

According to the firms, the merged entity will be the leading consumer publisher worldwide.

Random House posted operating profit of EUR185m (USD238.5m) last year on revenues of EUR1.7bn. Penguin’s operating profit and revenues came in at GBP111m (USD178.3m/EUR138.3m) and GBP1bn, respectively, and its assets stood at GBP1bn

Copenhagen Airport to sell 49% in Newcastle Airport operator NIAL

Danish airports operator Copenhagen Airports A/S (CPH:KBHL), also known as Koebenhavns Lufthavne A/S, said it had reached an agreement to offload its 49% stake in British NIAL Group Ltd, the parent of Newcastle International Airport Ltd, to a fund managed by Australian infrastructure manager AMP Capital Investors Ltd.

The deal, which is seen to be completed towards the middle of next month, is in line with Copenhagen Airports’ strategy to zero in on developing and running the airports in the Danish capital, it said. The value of the transaction was not disclosed.

The Danish firm’s exit from NIAL Group has been given the go-ahead by the seven municipalities which control the remaining 51% stake in the target. In connection with the deal, NIAL Group will refinance its group facility and seek new debt financing from the seven municipalities and the buyer. Thus, the offload is subject to the new facility accord and the investment accord remaining effective and becoming unconditional, Copenhagen Airports noted.

The Danish firm said the disposal would be reflected on its books in the fourth quarter of the year and would result in a gain affecting profit before tax for the year in the range of DKK750m (USD130m/EUR100.5m) to DKK770m.

RBC Capital Markets and Baker & McKenzie were picked financial and legal advisers on the deal, respectively, the vendor said.

TPG Capital enters race for London Stansted airport — report

US private equity major TPG Capital LP has entered the bidding race for Stansted, the London airport owned by BAA Airports Limited, the Financial Times reported citing sources familiar with the talks.

TPG is competing in the first bidding round against Australian financial services provider Macquarie Group Limited (ASX:MQG) and a consortium made up of The Manchester Airport Group Plc (MAG) and another Australian entity – Industry Funds Management. Stansted, the third biggest airport in London, is estimated to be worth GBP1bn (USD1.6bn/EUR1.2bn), the FT said.

According to several sources, MAG is the contender with the strongest chances of emerging victorious from the battle but TPG has its strengths as well. The US investor has its roots in the aviation industry having been created in the wake of Continental Airlines Inc’s rescue from bankruptcy. TPG has maintained its involvement with the sector and its co-founder David Bonderman is chairman of the board of Ryanair Holdings Plc (LON:RYA). The latter is the holding company for Irish-based budget carrier Ryanair Ltd, which is also Stansted’s top customer.

BAA was forced to put Stansted up for sale in the summer after the failure of its final attempt to reverse a Competition Commission ruling. The operator was instructed in 2009 to sell three airports as part of a decision to break up its monopoly, the FT reminded.

The newspaper went on to add that BAA and its majority owner, Spanish transport infrastructure company Ferrovial SA (MCE:FER), are expected to provide bidders with further details this week. The contestants are expected to receive information regarding the deadline for their second-round bids. According to the article, sufficient airport operating experience will be a prerequisite for making the shortlist.