Pearson shares reached their highest level for five years yesterday, as hopes of a takeover of the media conglomerate rose after a rival educational publisher was sold for more than expected.

Blackstone and KKR were named as potential stalkers as the shares rose 4.1 per cent, topping the FTSE 100 leader board. About 16 million shares changed hands, well above the average daily volume of 6.7 million.

The talk was fuelled by Bridgepoint’s purchase of Wolters Kluwer’s European education business for up to €775 million (£525 million). Pearson itself was outbid and Bridgepoint paid an estimated 12.6 times underlying earnings, above expectations. The unit had been expected to fetch €700 million.

Pearson, which owns the world’s biggest education business as well as the Financial Times, declined to comment yesterday, although the company is understood not to have received any bid approaches.

However, one source close to the company said: “As private equity gets more comfortable with education assets, it becomes possible that they would be willing to approach the whole group.”

A string of educational publishing assets have come up for sale in the past year as rivals have run into difficulties amid rapid technological change at a time when Pearson continues to grow. Last year Pearson improved like-for-like profits by 12 per cent to £405 million, as revenues gained 4 per cent.

This year Riverdeep acquired the venture capital-owned Houghton Mifflin in a $4.6 billion (£2.3 billion) deal that valued the target at 11.7 times underlying earnings, according to Dresdner Kleinwort, in line with the Wolters Kluwer multiple.

Also for sale are Thomson’s educational arm, which has attracted interest from Bertelsmann with private equity partners, and Reed Elsevier’s Harcourt operation, which has suffered from weak growth in its core US schools market.

Analysts said that Thomson Learning could fetch $5.5 billion and Reed’s unit £2 billion, on a higher valuation of 15 times underlying earnings. Private equity is expected to acquire both.

Pearson shares gained 34p to close at 865p.

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