Possible Takeover Bid Makes Reuters Shares Soar

by babblingdweeb | May 4, 2007 at 05:46 am

241 views | 0 Recommendations | 0 comments

Just days after trying to sort out Rupert Murdoch's $5 billion bid from left field for Dow Jones, another surprise bid rises to the top.
Reuters, a London based news agency has been trying to increase its revenues by venturing in new areas of business growth. Now a new opportunity has come in the form of a take over.

Like Dow Jones' family matters regarding voting powers in a merger or take over, Reuters has a bumpy road to navigate with a potential veto from independent trustees.

A bid would be complicated by Reuters unusual share ownership rules. Any attempt to buy more than 30% of the company can be vetoed by independent trustees of the Reuters Foundation Share Company. The foundation's objective, according to the Reuters annual report, is to protect the "independence, integrity and freedom from bias in the gathering and dissemination of news and information." (subscription required)

Who is the bidder? Well at this point the rumor mill is pointing its finger at Thomson Corp, a Canadian based information supplier. Thomson Corp.'s vision: Be the leading global provider of integrated information-based solutions to business and professional customers. [Per Thomson Corp]

The Globe and Mail newspaper of Canada, in a story on its Web site Friday, identified the bidder as Thomson Corp., citing people close to both companies who confirmed details. Thomson is a financial data and information provider based in Stamford, Conn.

If you were watching the market's reaction this morning, this could show support for a takeover; but that's just on preliminary information. If the market reacts favorably to a takeover its not always a sign of support, merely greed.

Not knowing additional details, it's hard to say which way the market is swaying.
[q
url="http://online.wsj.com/article/SB117826963541092114.html?mod=home_whats_news_us"]In
a written statement, it described the offer as a "preliminary approach"
and said there was no certainty it would lead to a bid. Reuters shares
jumped 21% to £5.95 ($11.83) on the London Stock Exchange, giving it a
market value of about £7.5 billion. (subscription required)[/q]