Pearson shares fell 7% to 730.2p in early afternoon trading on Wednesday after the company confirmed its rejection of a third and final takeover bid from Apollo.
Pearson commented that the cash offer “significantly undervalued” the group and its future prospects.
The offer would have bought the company out at £7.2 billion, with the takeover bid valuing the company at £6.7bn and Pearson’s net debt adding an additional £500 million.
The education firm released a statement that it had unanimously opted to reject the third bid for the entire issued and to be issued share capital of the firm for 870p per share, following two previous bids which had also been unanimously rejected by Pearson’s board.
According to the company, shareholders would have gained the 870p per share along with the scheduled 14.2p dividend for 2021, representing a total value of 884.2p per share for existing shareholders.
The education company said it was confident its direct-to-consumer lifelong learning strategy would bring long-term value for its shareholders, and is currently relying on its Pearson+ project and digital learning ecosystem strategy for its prospects.
“The board of Pearson considered the third proposal, together with its financial advisers, and concluded that it significantly undervalued the company and its future prospects,” the company said in a statement.
“Accordingly, the board of Pearson unanimously rejected the third proposal.”