BusinessBusiness RecoveryOverview: making the news

Overview: making the news

Prospects: takeover bid has spoilt Reuters CFO's quiet life

Just over two months ago Reuters chief financial officer David Grigson was
signing off a solid set of final results for the news and data organisation and
no doubt looking forward to a quiet few weeks before the next reporting period.

An £8bn offer from Canadian rival Thomson Financial, put forward a fortnight
ago, would have shattered any hopes Grigson had for a bit of downtime.

What’s Happened?

Thomson stunned the market with a paper and cash offer for Reuters of 679p,
prompting a spike in Reuters’ share price, which at the time was struggling to
break through the 500p level.

Following a strategic review, the Canadian group had decided to sell its
education business, Thomson Learning, for around £3bn to provide it with
capacity to launch and assault on Reuters.

The offer was just the spark that Reuters, and indeed Grigson, needed. A
survey conducted by Financial Director last year showed that during Grigson’s
tenure at Reuters, which began in August 2000, the company’s share price had
underperformed the FTSE 100 to such a degree that if you invested £1,000 when
Grigson took over your investment would only have been worth £357 in 2006.

What’s Going to Happen?

Sadly for Grigson the deal is already running into difficulties, and could
crash and burn having barely made it out of the blocks.

Confusion over the board structure is a major sticking point, and it is
unclear how Reuters chief executive Tom Glocer, David Thomson, the head of the
Thomson family business empire, and Reuters chairman Niall Fitzgerald will run
the newly merged entity.

Grigson’s role in a combined company is even more uncertain, as there may not
even be a role for him at all.

Analysts also fear that regulators could scupper the deal. Thomson and
Reuters do not overlap geographically, but there are concerns that their similar
strengths in investment banking and retail wealth management could see
regulators step in.

Presenting final results must now seem like a breeze for Grigson.

Related Articles

Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

5d Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

5d Emma Smith, Managing Editor
KPMG appoints new global head of insolvency

Business Recovery KPMG appoints new global head of insolvency

3w Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

5m Alia Shoaib, Reporter
Using insolvency as a debt recovery tool

Business Recovery Using insolvency as a debt recovery tool

6m Emma Smith, Managing Editor
UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

Business Recovery UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

8m Alia Shoaib, Reporter
Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

Business Recovery Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

9m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor