Pearson (NYSE: PSO) saw its stock spike in Friday trading after private equity firm Apollo said it was in the preliminary stages of evaluating a possible cash offer for Pearson. Apollo said there was no certainty an actual offer would be made.
Pearson has a market cap of $7.7 billion.
Pearson said in first received an offer from Apollo on Nov. 5 for 800 pence a share and the textbook publisher received a second offer of 854 pence, or the equivalent of $11 Billion U.S., on March 7, according to traders, who cited Bloomberg headlines from a Pearson statement. Pearson’s board “unanimously rejected” the second Apollo offer and said the price “significantly undervalues” the company.
The Apollo bid would represent a 31% premium to Pearson’s closing price in the UK yesterday and a 41% premium to the March 4 closing price, before the bid was made on Monday.
Apollo is required by not later than April 8 to either announce a firm into to make an offer for Pearson or talk away, according to the Pearson statement.
The Apollo and Pearson statements come after a Betaville item earlier said that a mystery buyer was said to be circling Pearson.
The Apollo bid for Pearson comes after Veritas Capital agreed to buy Houghton Mifflin Harcourt (NASDAQ:HMHC) for $2.8 Billion last month, a deal that several investors said they plan to not tender their shares into as it undervalues the education company.
PSO shares leaped $1.55, or 17.8%, to $10.24.