Reuters confirms takeover offer from Thomson Corp

by Jacquie Bowser, Brand Republic 08-May-07, 09:05

LONDON - UK news service Reuters has confirmed that it is in discussions with Canada's Thomson Corporation regarding a possible £8.8bn takeover bid.

The two firms said in a statement that there was "a powerful and compelling logic for the combination, which would create a global leader in the business-to-business information markets".

Should the bid be successful, the enlarged group would be called Thomson-Reuters and the combined Thomson Financial unit and Reuters financial and media businesses would be called Reuters.

The news agency released the statement to clarify the status of discussions for shareholders, stating that: "This is a large and complex transaction, much has still to be resolved and there can be no assurance that agreement will be reached."

According to Reuters, Thomson had offered 352.5 pence per share in cash plus 0.16 of Thomson shares for every Reuters share. That valued its shares at around 705p, about 43% more than the current market price.

Reuters stock surged 25% on Friday after speculation of the bid emerged.

Any prospective takeover of Reuters needs the approval of the Reuters Founder Share Company, a private company run by 15 trustees, which owns the "Founders Share", also known as a golden share, which can block a hostile bid.