Pearson to Purchase All American to Build Up Programming Unit

Pearson agreed to buy All American Communications Inc. for $509 million in cash and assumed debt, creating one of the largest international TV-production companies.

Pearson is paying $25.50-a-share cash, or 4.6% more than All American’s $24.38 closing price Tuesday, and would assume $136 million in debt. All American, which produces “Baywatch” and “The Price is Right,” said two weeks ago that it was in talks to sell itself.

Pearson, owner of the Financial Times newspaper and the Economist magazine, is taking a more down-market approach to the television business. The acquisition would double the size of its Grundy Worldwide unit, which produces game shows and soap operas, by adding such programs as “Family Feud,” “Match Game” and the “Adventures of Sinbad.”

“What they’re really buying them for is the game shows,” said analyst Art Rockwell of Yaeger Capital Markets.

Pearson said the move would help it in the age of burgeoning television competition by building up its programming unit. The company also has a stake in Channel 5, a low-budget British TV channel.

Pearson said it would take a restructuring charge of less than $8 million in 1997 and expects the acquisition to add to its earnings in the first year.

Pearson’s American depositary receipts rose 25 cents to $13. All American shares rose 75 cents to close at $25.13 on Nasdaq.