News Corporation is reportedly readying a £1 billion offer for Penguin in an attempt to scupper plans for a new publishing giant.

News Corp, which owns HarperCollins, is believed to have indicated to Penguin’s owner Pearson that it will make a substantial cash offer for the publisher.

The interest, reported in the Sunday Times yesterday, comes as the owners of Penguin and Random House, two of the world’s “big six” publishers, continue talks over a combination that would create a business worth £2.4 billion.

Germany’s Bertelsmann, which owns Fifty Shades of Grey publisher Random House, will hold 60 per cent of the new business if the deal with Pearson goes through.

Pearson, which also owns the Financial Times, said last week it had not reached an agreement with Bertelsmann and that there is no certainty of a deal.

Any combination involving two of the world’s biggest publishers would face scrutiny from competition authorities, with a deal involving HarperCollins likely to face fewer regulatory hurdles in the US and Europe. - (PA)