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.
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.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children