Pearson Targets $500m for Mergermarket's Initial Bid

British education giant Pearson expects $500m (£324.7m, €375.7m) for its Mergermarket unit. Anonymous sources have told Bloomberg the valuation has been sent to potential buyers ahead of first-round bidding at the end of September.

The deal is part of Pearson's reorganisation and will be advised by JPMorgan Chase. Pearson closed at 1,324p yesterday.

Bloomberg's report claims private equity firms like New York-based Warburg Pincuss are among those interested. The publishing house plans to attract two or three more bidders by November, so as to reach an agreement by the end of the year.

Private equity firms that could be interested in Mergermarket are General Atlantic, Silverlake, Bridgepoint, Hellman and Friedman, CVC, KKR and Apax Partners, according to Reuters.

Bloomberg's anonymous source said Mergermarket's management team will have a say in picking the winning bid. Also, the team, led by chief executive officer (CEO) Hamilton Matthews is expected to favour a sale by takeover to avoid troubling public shareholders.

Mergermarket offers a subscription-based service for reports and analysis of global mergers and acquisitions and reported $150m in sales last year. The company was founded in 2000 to offer financial information to law firms, M&A institutions and other clients, including economic institutions like Hedge Funds. It has over 500 journalists and analysts stationed across the world.

Pearson, which also owns Financial Times, acquired Mergermarket for $192m in 2006 and it is now a part of the Financial Times Group.

Earlier in July, the publishing house said it was merging its Penguin publishing unit with German media giant Bertelsmann's Random House to create a company with 53% Bertelsmann holding and 47% Pearson holding.

The merger was in response to challenges faced by the print sector as a result of the rising popularity of e-books and Amazon.