UPDATE 1-Corinthian shares up on Washington Post stock buy

(Rewrites lead paragraph; adds analyst comment, byline)

By Chelsea Emery

NEW YORK, Feb 19 (Reuters) - Shares of Corinthian Colleges Inc (COCO.O: Quote, Profile, Research, Stock Buzz) jumped 13 percent Tuesday on speculation that Washington Post Co's (WPO.N: Quote, Profile, Research, Stock Buzz) recent purchase of an 8.1 percent stake in the for-profit education company signals plans by the media group to buy Corinthian.

In a regulatory filing on Feb. 15, Washington Post said it had acquired 6.89 million Corinthian shares because they represented "an attractive investment opportunity."

"We believe Washington Post will use this holding to enter talks with Corinthian," wrote Deutsche Bank analyst Paul Ginocchio in a note to clients.

Washington Post representative Jay Morse said in response to speculation that "it's an investment," adding the company was not commenting further.

Washington Post operates post-secondary schools through its Kaplan Higher Education division, which serves more than 75,000 students at about 70 schools in the United States and Europe.

Washington Post, which also owns The Washington Post newspaper as well as cable television systems, made a series of share purchases from Jan. 22 through Feb. 14, according to the filing.

Corinthian shares rose $1.06, or 13.73 percent, to close at $8.78 on Nasdaq. Through Friday, the shares had tumbled 50 percent this year on worries that the U.S. credit crunch will make it tough for students to get education loans, hurting enrollment and profits at education companies.

Washington Post shares slipped 0.39 percent to $736.00 on the New York Stock Exchange.

"We think (the) 8.1 stake in Corinthian Colleges likely goes higher," Ginocchio wrote. "Washington Post holding a minority position does not make sense to us." (Reporting by Chelsea Emery; editing by John Wallace, Richard Chang)



Source: http://www.reuters.com