Canadian Thomson Corporation is eyeing to takeover Reuters, the world’s largest publicly traded financial data provider. Valuing the UK news and financial information group at more than £7.8 billion (US$15.52 billion), Thomson aims to become the world’s biggest provider of market data.
Shares of Reuters jumped 26 percent, to US$12.40, in London trading after news spread in the market. It was the highest single-day increase since its public offering 23 years ago.
The merger approach follows an unsolicited $5billion bid this week from Rupert Murdoch’s News Corporation for The Wall Street Journal’s parent company Dow Jones, and added to the takeover frenzy in the media sector.
Reuters, which is now 156 years old with almost 17,000 employees and 196 news bureaus worldwide, has a framed constitution that came into force in 1941, to secure its independence from unwanted takeovers. As per this constitution, any single Reuter shareholder cannot own more than 15 per cent share, while a special golden share held by the Reuters Founder Share company can block any hostile takeover but it would not prevent a friendly agreed bid.
Experts are speculating that Thomson Corporation may have to pay 700p or 750p a share, which would value Reuters at £8.8bn to £9.5bn. Reuter’s shares closed last night at 615.75p.
A deal between the two could flush out other bidders, with analysts speculating that Google, Microsoft or even News Corp could enter the fray, possibly alongside private-equity firms. However, the details of how a Thomson offer would be financed are not known, although analysts noted that it is close to selling off its education arm in a move that is likely to generate about $5bn in cash.
Image: Wikimedia
Via: NYTimes
