Thomson makes $17.5b bid in cash & stock for Reuters

Canada’s Thomson Corporation has announced a preliminary takeover offer worth over $17.5 billion in cash and stock for Reuters Group, one of the world’s largest leading publicly traded financial data provider. In less than a week after Reuters first disclosed an unsolicited takeover approach from an unidentified suitor, the two companies said in a joint statement that they were in talks for combining their businesses to create a global leader in business-to-business information markets. The announcement came within hours of Thomson confirming that it has made a preliminary approach to Reuters, which also runs a leading international news agency. Under the terms of the proposed agreement, Reuters’ shareholders would get 352.5 pence and 0.16 Thomson stock per share. Based on Thomson’s Monday closing price, the offer values Reuters at 697 pence a share, representing 13% premium over Reuters’ last closing price. Thomson’s bid for Reuters comes on the heels of media baron Rupert Murdoch making a $5 billion hostile bid for Dow Jones group, which also owns news brands like The Wall Street Journal and Dow Jones Newswires. The shares of Reuters were trading nearly four per cent up at 642 pence a share in early morning trade, putting the company’s market capitalisation at about £8.1 billion. It had gained over 30% in intra-day trade and closed 25% higher on May 4 when it was first disclosed that the company was the target of a takeover bid. The two companies said that a potential deal would result in annual synergies worth over $500 million within three years. The enlarged group would be called Thomson-Reuters, while the combination of Reuters’ financial and media businesses and Thomson Financial unit would be named as Reuters.

SOURCE : THE TIMES OF INDIA