Thomson, Reuters offer pact details

LONDON — Reuters CEO Tom Glocer will lead the combined company if Thomson Corp. succeeds in its $17.5 billion bid for Reuters Group PLC, creating the world's biggest financial news and information provider.

A combined Thomson-Reuters — the name proposed by Thomson — would have a market capitalization of around $45 billion and leapfrog current market leader Bloomberg LP in providing real-time data to traders and investment professionals.

The companies outlined details of the proposed deal Tuesday, revealing that several issues had already been agreed even while stressing that nothing had been finalized and there was no certainty a deal would proceed.

Analysts were optimistic, saying the proposed offer of 352.5 pence ($7.03) per Reuters share in cash and 0.16 Thomson shares for each Reuters share was likely to go ahead without any major roadblocks.

While Reuters said discussions continue on a number of "material aspects of the deal," analysts pointed out that agreement had already been reached on the major points of potential contention such as management issues.

The companies said in the joint statement the new company would retain its primary market listings in Toronto and London, but would be controlled by the Thomson family, which currently owns roughly 70 percent of the equity in Thomson Corp.

Thomson said that Woodbridge, the Thomson family holding company, would own approximately 53 percent of Thomson-Reuters, other Thomson shareholders would have 23 percent and Reuters shareholders about 24 percent.

The companies said that Glocer would become CEO of Thomson-Reuters, while Thomson CEO and President Richard Harrington would retire.

"We don't see anyone else topping this offer, and we see the likelihood of a deal as high," said ABN Amro analyst Paul Gooden.

Numis Securities said a potential rival bidder couldn't be entirely ruled out, but also noted the expected synergies and that Thomson was "the bidder best placed to secure Reuters."

In their joint statement, the two companies said there was a "powerful and compelling logic for the combination, which would create a global leader in the business-to-business information markets."

Projected savings of $500 million within three years "is greater than we would expect to be deliverable in a deal with any other suitor," said Charles Peacock, analyst at Seymour Pierce in London.