Reuters shares soar after takeover offer

Published May 5, 2007

LONDON - Thomson Corp.'s reported bid Friday to acquire Reuters, the British news and financial information company, signals that it wants to go head-to-head with Bloomberg in the lucrative market of delivering real-time financial data and news to customers like investment banks.

Shares of Reuters Group PLC soared 25 percent after it disclosed it had received a takeover offer. That drove its market capitalization to more than $15-billion - higher than the Financial Times of London said Thomson of Stamford, Conn., was willing to pay.

Thomson, Reuters and Bloomberg LP all compete aggressively in what is known as the "terminal" market, for the data terminals on desks at the world's major banks and brokerages. Reuters was the market leader for many years, though it has steadily lost ground to Bloomberg. An April report from Inside Market Data Reference said Bloomberg has 33 percent of the market share, with Reuters at 23 percent and Thomson at 11 percent.

Thomson has transformed itself in the past decade from an owner of newspapers and other print products. It has built up its legal information business, and is about to sell Thomson Learning, its book division, for about $5-billion.

Reuters' constitution, set when the company floated shares in London and on the Nasdaq stock market in 1984, bars anyone from holding 15 percent or more of its issued shares. If anyone tries to obtain 30 percent or more of the shares, Reuters may use a single Founders Share to pass or defeat any motion at a general meeting.

As the preliminary approach indicated, analysts believed Reuters could yield to a takeover despite its structure.