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 | | Monday, 24 December, 2001, 12:42 GMT Pearson to sell RTL stake  RTL - the TV firm behind Baywatch star Pamela Anderson Pearson has dumped the broadcasting firm which controls Channel 5 and makes Baywatch, selling its stake to German media giant Bertelsmann Pearson, which owns the Financial Times and publisher Penguin, said it would use the �944m ($1.3bn; 1.5bn euro) gained from the sale to pay off debt. The firm last week warned of a profits shortfall due to the ongoing slump in advertising revenues, and troubles in Latin America. RTL owns 23 television and 17 radio stations across Europe - including the UK's Channel 5 - and makes the hugely successful beach drama Baywatch, the Pop Idol television talent contest and game show The Price is Right. Going all the way The sale gives Bertelsmann a 89% shareholding in RTL. But the German firm has already declared its interest in gaining complete control and has begun talks with RTL's board over an offer of 44 euros per share for the outstanding stock.
Pearson chief executive Marjorie Scardino said the sale would enable the firm to focus on core businesses "as well as strengthening our balance sheet and enhancing our earnings and cash flow". Like other media companies, including Pearson itself, RTL has been hit by the slowdown in advertising sales. Earlier this month, RTL warned its advertising revenues in Britain, France and Germany could be 10% lower than last year. Earnings boost Pearson created RTL in July 2000 when it merged Pearson TV with CLT-Ufa. It expects the sale to bring it a profit of �130m ($187m) and to enhance its financial results in 2002. In 2001, the sale will contribute �35m to operating profits, Pearson said. "We are proud of the television business that we helped to create that is now RTL and we wish our colleagues there well for the future," said Ms Scardino. Door stays ajar The price Pearson is getting from Bertelsmann works out at 44 euros for each a RTL share. But Pearson could get more if Bertelsmann ends up paying any price above 44 euros a share for RTL's stock any point in the next 18 months. News of the stake sale sent Pearson's shares surging 4.4% to 790p in London in early Christmas Eve trading. By the close, Pearson shares had retreated to 779.5p, up 23p on the day. | | See also:  Top Business stories now:  Links to more Business stories are at the foot of the page. | |||||||||||||||||||||
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