Thomson set to take over Reuters
Posted on: 05:12 PM IST May 08, 2007
London: Canada's Thomson Corporation has announced a preliminary takeover offer worth over $17.5 billion dollars in cash and stock for Reuters Group Plc, 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 late on Monday night 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 yesterday closing price, the offer values Reuters at 697 pence a share, representing nearly 13 per cent premium over the London-listed Reuters' last closing price.
Thomson's bid for Reuters comes on the heels of media baron Rupert Murdoch making a five billion dollar hostile bid for US-based media giant 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 pounds. It had gained over 30 per cent in intra-day trade and closed 25 per cent higher on May 4 when it was first disclosed that the company was the target of a takeover bid.