Friday, May 04, 2007

Bid Rumors: Reuters & Thomson

The markets are in a tizzy this morning with rumors of PE bids and or approches for AOL, Time Publishing, EMI and Reuters. Even in Australia where media deregulation has just occured media stocks prices are up and will Microsoft buy Yahoo?

Reuters has confirmed that they have been approached by an unnamed third party about a bid for the company which they say may or may not lead to a bid. The most likely 'third-party' is Thomson which would like to add the news and information provider to their existing information (Legal & Regulatory, Financial) platforms. Given the sale of the Learning division - and some announcement about finalists should be imminent - Thomson is itching to spend the money and have been more than forthright about investing in expanding businesses that fit with their long term goals. Reuters does that and more importantly after a troubling effort early in the decade to harness the web and migrate their products to a new platform, Reuters appears to be in an upswing. This must be good news to Thomson.

Reuters shares were up sharply this morning placing a market valuation of over $15bill. While Thomson is expected to get $5.5bill for the Learning division their balance sheet is more than strong enough to complete this acqusisition with relative ease. It is a good job that Reuters CEO Tom Glocer was able to spend some time at Singita recently since he is going to be busy for the next six months.

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