Canadian publisher Thomson Corp is in talks to buy Reuters Group

Another mega media merger on the cards​
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London: Canadian publisher Thomson Corp is in talks to buy Reuters Group Plc for about 8.8 billion pounds ($17.6 billion, or nearly Rs 72,000 crore) to create the world’s biggest news and financial data company, the two firms said on Tuesday.

Under the terms of the proposed deal, Reuters CEO Tom Glocer would become chief executive of a dual-listed group to be called Thomson-Reuters, the companies said in a joint statement.

Reuters investors would get 352-1/2 pence in cash and 0.16 Thomson stock for each share, equivalent to 697 pence (Rs 565) a share at last closing price.

That would be 42 per cent above Reuters closing price on Thursday, the day before it announced a bid approach. The deal value is based on the number of outstanding Reuters shares. Though there are concerns about the length of time to complete a deal and possible obstructions from competition regulators. “We would expect close US and EC (European Commission) regulatory scrutiny,” Credit Suisse analysts said in a note.


New entity to be largest in business news market
Thomson, whose publishing interests span law, tax and scientific research, has been building up its financial data business as it looks to tap into booming global markets.

Currently third with 11 per cent of the world’s $12.5-billion market data business, Thomson would jump to 34 per cent with Reuters, putting it just ahead of privately-owned Bloomberg on 33 per cent, according to Inside Market Data. A deal would add Reuters’ strength in sales and trading to Thomson’s base with money managers and investment bankers.


Rival bid cannot be ruled out
The talks come amid a frenzy of dealmaking in the media sector. Last week, Rupert Murdoch’s News Corp made a $5-billion bid for Wall Street Journal owner Dow Jones & Co Inc, which was rebuffed by Dow Jones’ controlling investors.

“Although a rival bid cannot be ruled out, given the scale of synergies on offer (and therefore healthy premium offered) ... we view Thomson as the bidder best placed to secure Reuters,” Numis Securities analysts wrote in a research note.

Thomson and Reuters said they expected to make over $500 million of annual synergies within three years of completion of a deal, which they said could take place this year, but might not occur until 2008.

The combined Thomson Financial unit and Reuters financial and media businesses would be called Reuters, and adopt the Reuters trust principles aimed at protecting the independence of its news, the companies said.

The Reuters Founders Share Co, run by 15 trustees, has a “golden share” and could block a take-over.

“It should be emphasised that discussions are at a stage where there can be no assurance that agreement will be reached. No transaction will be announced without the support of the Reuters Founders Share Company,” the companies said.
 
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