Reuters Suitor Seen As Thomson
Friday, May 4, 2007; 6:14 PM
LONDON -- Thomson Corp.'s reported bid Friday to acquire Reuters signals that it wants to go head to head with Bloomberg in the lucrative market of delivering real-time financial data and news to customers like investment banks.
Shares of the British news and financial information company soared 25 percent after it disclosed it had received a takeover offer. That drove its market capitalization to more than $15 billion _ higher than the Financial Times said Stamford, Conn.-based Thomson was willing to pay.
Thomson, Reuters Group PLC and Bloomberg LP all compete aggressively in what is known as the "terminal" market, for the data terminals on desks at the world's major banks and brokerages. Reuters was the market leader for many years, though it has steadily lost ground to Bloomberg. An April report from Inside Market Data Reference said Bloomberg has 33 percent of the market share, with Reuters at 23 percent and Thomson at 11 percent.
Thomson has transformed itself in the last decade from an owner of newspapers and other print products. It has built up its legal information business, and is about to sell Thomson Learning, its book division for about $5 billion.
In a note to Reuters staff, Chief Executive Officer Tom Glocer said he could say little about the approach. "However, I want you to know that in considering this proposal I and my colleagues on the Reuters board will be guided by what is in the best interest of Reuters and its stakeholders, including employees," he said.
Jason Stewart, a spokesman for Thomson at its Stamford, Conn., headquarters, said Friday the company will not comment "on rumors or speculation."
Reuters shares rose 25 percent Friday to 615 pence ($12.24) on the London Stock Exchange, driving up its market capitalization to 7.74 billion pounds ($15.4 billion). The company's U.S. shares rose $15.84, or 27 percent, to $74.76 in New York.
Shares of Thomson fell 28 cents to $43.45.
Reuters' constitution, set when the company floated shares in London and on the Nasdaq stock market in 1984, bars anyone from holding 15 percent or more of its issued shares, the company's Web site says.
If anyone tries to obtain 30 percent or more of the shares, Reuters may use a single Founders Share to pass or defeat any motion at a general meeting.
As the preliminary approach indicated, analysts believed Reuters could yield to a takeover despite its structure.
"The restrictions of the constitution, however, are by no means insurmountable and an agreed bid is possible," said Sam Hart, an analyst at Charles Stanley.