Reuters receives takeover bid, shares soar

Financial news and information provider Reuters Group said on Friday it had received a preliminary takeover approach from an unidentified suitor, sending its shares up more than 25 percent.
Earlier, traders had reported market speculation of a 600-pence-a-share bid (about $11.88) from Canada's Thomson Corp. or Rupert Murdoch's News Corp. Reuters declined further comment. Thomson declined to comment. News Corp. could not immediately be reached.

In early trading in London on Friday, Reuters shares were up 24.3 percent at 611-1/2 pence, valuing the business at about $15.3 billion. They earlier touched a 5-year high of 617-3/4 pence. "The board of Reuters confirms it has received a preliminary approach from a third party which may or may not lead to an offer being made for Reuters," Reuters said in its statement.

"There is no certainty an offer will be made or necessary approvals, including those required under Reuters constitution, will be received."

Under Reuters ownership structure, no shareholder may own 15 percent or more of Reuters shares and a single golden share held by The Reuters Founder Share Co. can block a hostile bid.

The Reuters Founder Share is run by 15 trustees, charged with ensuring the "independence, impartiality, integrity and freedom from bias" of the global news organization.
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An agreed bid, however, would be possible. Rupert Murdoch's News Corp. has bid $5 billion for Dow Jones, but the offer has been turned down by Dow Jones' controlling shareholder. Dow Jones owns The Wall Street Journal newspaper and is a rival with Reuters, Thomson and privately-owned Bloomberg in providing real-time financial news.

News of Murdoch's bid for Dow Jones on Tuesday sparked a wave of speculation about further consolidation in the media sector.

Thomson moved last year to expand its financial news content by buying London-based AFX News for around $20 million. The new Thomson-branded service is expected to launch by the end of next month.

Story Copyright © 2007 Reuters Limited. All rights reserved.