Pearson says not interested in Santillana stake

BARCELONA Nov 18 (Reuters) - A report that British publishing group Pearson (PSON.L) wants to buy a minority stake in Spanish book publisher Santillana (PRS.MC) is a "very old story", Pearson's finance director said on Wednesday.

Santillana's owner Prisa has agreed a deal worth around $362 million to sell 25 percent of the publisher to a Credit Suisse (CSGN.VX) equity fund but Britain's Sunday Times reported last week that Pearson was about to rejoin the bidding.

"I was a bit surprised to see this back in the press recently. I think this is a very old story. We've been very clear that we are not interested in acquiring minority stakes in larger businesses," Robin Freestone told an investor conference.

"I don't think anything's changed in the last few weeks," he said in answer to a question, adding that the company did not comment on merger speculation.

Freestone said Pearson -- which owns the world's biggest educational publishing business, the Financial Times, and Penguin Books -- would not jeopardise its credit ratings by attempting the wrong kind of acquisition.

"We are very wedded to our ratings. We've had BBB+, BAA1 ratings now ... for 10 years. I don't think we would give that up easily at all," he said. "It makes us very focused."

Pearson has fared better than most publishers through the downturn, thanks to low exposure to shrinking advertising budgets and highly international operations.

But Freestone reiterated that this year would be tough for Pearson's school textbooks business, which has suffered from state budget cuts.

The market for the adoption of new textbooks by U.S. states is expected to rise to $900 million next year from $500 million this year. The size of the market varies widely from year to year as states have different multi-year renewal cycles.

This year, Pearson won 37 percent of the new adoptions business for which it competed, thanks to a popular new range of digital mathematics teaching resources.

"I don't think we're necesssarily always going to be able to do 37 percent," Freestone said, adding Pearson would compete next year for more than the 86 percent of the market for which it bid this year.

Despite the expected improvement in the North American schools market, Freestone said 2010 would not be easy.

"I think we'll be pretty cautious. I don't think we're going to expect a great deal of help from the marketplace in most of our businesses -- or any of our businesses -- next year," he said. "I just sense there's not a lot of upside." (Reporting by Georgina Prodhan; Editing by Dan Lalor)