Dec 15, 2004. /Lesprom Network/. Pearson and Retos Cartera S.A. are today announcing an agreement relating to a cash offer for Recoletos, the Spanish media group. Retos Cartera, an investment vehicle formed by a consortium of Spanish investors, proposes to make a public tender offer for the entire share capital of Recoletos valuing Recoletos at Euro 941 million and Pearson's 79% stake at Euro 743 million. The offer is subject to regulatory approval and is expected to be completed in the first quarter of 2005. Retos Cartera has agreed to launch the offer at a price of Euro 7.20 per Recoletos share, representing a 19% premium to yesterday's closing price of Euro 6.06, and a 25% premium on an ex-cash basis. At 30 September 2004, Recoletos had net assets of Euro 283 million including Euro 196 million of cash. The offer to Pearson will not be conditional on acceptance by other Recoletos shareholders. The consortium of investors behind Retos Cartera includes members of the Recoletos management team, individual Spanish investors and the Banesto banking group. Banesto and three other banks have issued guarantees in respect of Retos Cartera's cash payment obligations under the offer. Other terms of the transaction are expected to include: If the consortium sells Recoletos within 18 months of completion of the offer, Pearson and other accepting shareholders would be entitled on a pro rata basis to a share of the upside above Euro 7.20 plus agreed transaction costs, payable in cash and subject to certain conditions. Retos Cartera has agreed that, on completion of the offer, Recoletos will enter into a co-operation agreement with Pearson. The agreement will cover 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 Expansiуn, Spain's leading business newspaper, if Recoletos sells it within 18 months of completion of the offer. For the first nine months of 2004, Recoletos reported sales of Euro 198 million, EBITDA of Euro 30 million and EBIT of Euro 22 million. Marjorie Scardino, Pearson's chief executive, said: "The growth of Recoletos has been strong, making it a media powerhouse in Spain. Now that its 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. This transaction offers us very strong value for Recoletos and an ongoing relationship with the company we've helped to build." Pearson was advised by Lazard and Citigroup.