LONDON (AP) — Thomson Corp.’s reported bid yesterday to acquire Reuters 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 such as investment banks.
Shares of the British news and financial information company 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 said Stamford, Conn.-based Thomson was willing to pay.
Thomson, Reuters Group PLC 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 last 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 $5 billion.
In a note to Reuters staff, Chief Executive Tom Glocer said he could say little about the approach. “However, I want you to know that in considering this proposal I and my colleagues on the Reuters board will be guided by what is in the best interest of Reuters and its stakeholders, including employees,” he said.
Jason Stewart, a spokesman for Thomson at its headquarters, said yesterday the company will not comment “on rumors or speculation.”
Reuters ose 25 percent yesterday to $12.24 in London, driving up its market capitalization to $15.4 billion. Shares of Thomson fell 29 cents to $43.44 in New York.
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, the company’s Web site states.
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 thought Reuters could yield to a takeover despite its structure.
Reuters, the longtime market leader in delivering market data, has steadily lost ground to Bloomberg. An April report from Inside Market Data Reference put Bloomberg at a 33 percent share of the “market data” universe, with Reuters at 23 percent and Thomson at 11 percent.
Though Reuters’ own figures differ, the company has acknowledged feeling the competitive pressure. While Bloomberg sells one terminal at one price, Reuters offers a range of programs — some with overlapping functions — at different prices. Streamlining that is a priority of Mr. Glocer, the first American to run the British stalwart.
While most people probably know the Reuters name for the group’s news operation, that is just a small part of the company’s business. Of Reuters’ 2006 revenue of $5.11 billion, only $338.3 million of that came from the news segment — although it is a key selling point for terminals, as well.
Still, adding Reuters news operation could cause integration issues for Thomson, which acquired the AFX financial news service last year from Agence France-Presse and has been expanding its news bureaus in Europe to better compete with Reuters and Bloomberg.
News of the proposal came just three days after it was reported that Rupert Murdoch’s News Corp. had offered to buy Dow Jones & Co. for $5 billion.
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