Reuters agrees to Thomson buyout

[muriel_volestrangler]

Source: BBC

News and information group Reuters has agreed to be bought out by Canadian financial data provider Thomson in a deal worth about £8.7bn ($17bn).
...
At the same time, some observers have questioned whether the agreement will damage the reputation of Reuters' news service.
...
"Reuters journalists are unhappy," the BBC's business editor continued.

"There will be concerns that over time Reuters general news operations will become marginalised within an outfit that sees its future as supplying intelligence and tools to those who operate in global financial markets."

Read more: http://news.bbc.co.uk/1/hi/business/6656525.stm

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Presently, no-one is allowed to own more than 15% of the Reuters shares. Now, the Thomson family will own 53%.

[Up2Late]

1. This worries me a LOT! I hope the don't ruin Reuters.

It's one of the few places that still reports the news well.

[papau]

2. I agree - and therefore also worry n/t

n/t

[ohio2007]

3. I didn't know Reuters was in trouble. Why did they have to sell?

Revenue problem?

[muriel_volestrangler]

4. It's just a business deal, I think - not forced

Thomson and Reuters, both suffering from intense competition from Bloomberg, the financialdata and analytics company owned by New York mayor Michael Bloomberg, first talked about linking the companies two years ago. Originally, the idea was to merger the financial information divisions only, leaving Thomson and Reuters as separately traded companies.

The talks failed last summer, partly for tax reasons. At that point, the only option was a full-blown merger of the two companies. To accelerate the deal and raise cash, Thomson placed its Learning division on the auction block. The sale, to Apax Partners and OMERS Capital for $7.75-billion last week, raised at least $1-billion more than expected. This means Thomson will not have to borrow money to finance the shares and cash purchase.

http://www.theglobeandmail.com/servlet/story/RTGAM.20070515.wthomsonreguly0515/BNStory/Business/columnists

[ohio2007]

5. "intense competition from Bloomberg" NT

[Robbien]

7. There is a lot of excess venture cash out there

and instead of building and expanding businesses, these vultures go out and buy up existing businesses. Usually they load that business up with a bunch of debt; they pay big dividends to stockholders and execs; then gut the business of "excess" operating costs (i.e. jobs), then sell out.

It is standard operating procedure for private equity firms such as Carlyle and Blackstone, etc.

[ohio2007]

8. Jesus Chrysler...I think you've nailed it .... nt

[damntexdem]

6. Oh darn! I thought that this would mean that either ...

Tommie or Fred wouldn't be running in the GOP primaries. ;-)

[myrna minx]

9. LOL, I was kinda thinking the same thing.

:D

[Kat45]

10. Good ol' Thomson! They outsourced my job 8 years ago.

Actually, outsourced my whole department. And ever since that layoff, I haven't found a lasting job.