Pearson today said that Retos Cartera, the investment shell company formed by a consortium of Spanish investors, has made a cash offer for Recoletos Grupo de Comunicacion, the Spanish media group which publishes Marca, the country's top-selling sports newspaper.

The €7.20-a-share offer values Pearson’s 79 per cent stake in Recoletos at €743 million (£514m).

Pearson, the Penguin books to Financial Times group, said the deal would be subject to regulatory approval and that it was expected to be completed in the first quarter of 2005.

Panmure, the broker, maintained its "hold" recommendation on Pearson shares, noting that "this deal will improve the quality of the company’s earnings".

Under the offer, Retos Cartera has agreed to enter into a co-operation agreement with Pearson, covering ongoing business relationships between the two groups including paper purchasing, editorial content sharing, joint printing arrangements and advertising sales.

Retos Cartera has also agreed that Pearson will have a first right of refusal to buy Expansion, Spain’s leading business newspaper, if Recoletos sells it within 18 months of completion of the offer.

Retos Cartera's investors include members of the Recoletos management team, individual Spanish investors and the Banesto banking group.

Pearson expects the disposal of its stake in Recoletos to be broadly neutral to adjusted earnings per share and return on invested capital in 2005.

It expects to realise net cash proceeds of £380 million and a net profit of about £140 million from the stake sale, the statement added.

Pearson intends to use the proceeds to invest in its businesses, both organically and through bolt-on acquisitions, and to pay down debt.

Marjorie Scardino, Pearson’s chief executive, said: "Now that its (Recoletos) strategy - in sport, lifestyle and general publications - is taking it further away from the FT Group’s focus on business and financial news and information, it is time for us to part company."

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive