Thomson confirms Reuters bid
Published May 8th, 2007
News agency Reuters has confirmed it is in takeover talks with data company Thomson, and that the Canadian firm has made a offer to buy it.
Speculation that Reuters was a target had pushed its shares higher on Friday.
Analysts say there is room for mergers in the news industry as firms try to cut costs and increase clients.
Last week, Rupert Murdoch’s News Corp tabled a $5bn (£2.5bn) bid for Dow Jones, the media firm that owns the Wall Street Journal.
In a statement on Tuesday, Reuters said that because of the speculation about a bid from Thomson, “both boards thought that it was in the shareholders’ interests to clarify the status of the discussions”.
It added that Thomson had offered 352.5 pence in cash plus 0.16 of Thomson shares for every Reuters share.
According to Reuters, that valued the UK-based news agency’s shares at between 697p and 705p, about 40% more than their current market price.
Any prospective takeover of Reuters would have to win the backing of the Reuters Founder Share Company.
The group, run by 15 trustees, holds a single golden share in the company, giving it the power to block any hostile takeover of the firm.
Analysts said that a merger between Thomson and Reuters would make sense as the Canadian company has the cash to finance a takeover and already has a news and financial data operation.
They added that by combining operations, Thomson and Reuters would be better placed to take on their rival Bloomberg.
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