Pearson is selling its slice of BSkyB, which will give the satellite giant its first break on the FTSE 100 index. Meanwhile, The Telegraph’s shares fell

Not everyone, it seems, is away with the bucket and spades. There has been sufficient activity in the media sector this past week to fill market-makers’ screens with more than increasingly desperate foreign holiday offers from the tour operators.

Pearson led the activity by confirming that it is seeking shareholder approval for most or all of its 9.7 per cent holding in BSkyB. The sale will be worth about 550m at current prices and it is thought that a global offering will be sought through Goldman Sachs and BZW.

The move is good news for BSkyB, the satellite broadcaster that is 40 per cent owned by News International. It will herald the company’s debut on the FTSE 100 index now that more than 25 per cent of its shares are publicly tradeable.

And, on present performance, they should attract some interest. BSkyB’s first full-year results since flotation last year revealed pre-tax profits of 155m, a 67 per cent increase on the previous year, and a dividend of 2.5p. One in the eye for those commentators that used to question the quality of the company’s earnings.

It’s a slightly different story for the other party in the BSkyB share-stake sale. Pearson, owner of the Financial Times, brought forward its interim results announcement to last Friday to coincide with the publication of an investors’ circular calling an extraordinary general meeting to vote on the proposed share sale.

Its results consequently suffered in comparison with BSkyB. Pearson’s profits for the half fell by some 27 per cent from 69.3m to 50.5m on turnover that increased from 648.8m to 780.9m. The market had expected profits in the range of 55m to 65m. Pearson’s shares duly dived 10p to 612p, having already lost 11p the previous day on news of the BSkyB share sale.

Publishing group The Telegraph, led by Conrad Black, meanwhile announced a 29 per cent fall in pre-tax profits for the first half from 30.3m to 21.5m, which included a 7.5m contribution from the group’s interest in Carlton Communications. The Telegraph’s shares fell a full five per cent to 393p.

The problem was the price war with Rupert Murdoch’s Times Newspapers. But that is petering out and last month’s increase in The Daily Telegraph’s cover price from 30p to 35p is worth 13m across a full year. The newsprint crisis also is under control. The City expects that next year’s pre-tax profits could exceed 60m, which puts the shares on a prospective multiple of 13. Below 400p, the shares are a cheap recovery opportunity.

Elsewhere, Black is already doing better in the newspaper industry. Australian group John Fairfax, in which Black holds a 24.9 per cent stake, advanced operating profits 33 per cent in the year to end-June. It has to be said that in Canada results showed a profits collapse from some 64.4m to just 5.3m, though the earlier figure included a special gain from the sale of Telegraph. But the worst is over and the world will look a better place for Black in a year’s time.

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