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Last Updated: Friday, 4 May 2007, 18:47 GMT 19:47 UK
Takeover approach buoys Reuters
Reuters building in Times Square, New York

Shares in news agency Reuters have surged by more than a quarter on news it has received a takeover approach.

Reuters said it had been approached by an unnamed third party but added that there was "no certainty" that a formal offer would be made.

Earlier speculation had suggested that Canada's Thomson Corporation could be one possible suitor for the financial news and information provider.

Reuters has been turning around its business after a number of tough years.

Turnaround

The company's shares closed 123.5 pence, or 25.09%, higher at 615.75p on the London market following the news.

We believe the most likely bidder is Thomson
Numis Securities

Earlier talk on the market had been of a possible 600p-a-share bid from Thomson, while further rumours suggested Rupert Murdoch's News Corp could also be in the running.

However, just two days ago News Corp tabled a $5bn (2.5bn) offer for Dow Jones, owner of the Wall Street Journal.

"We believe the most likely bidder is Thomson," said analysts at Numis Securities.

Thomson "is already a player in the financial space and, with the sale of its College Education business for $5bn well advanced, has the firepower to fund a deal", the analysts explained.

One of Reuters' leading shareholders, hedge fund ValueAct Capital, said it believed Reuters and Thomson would represent a "fabulous combination".

Any prospective suitor will have to win the backing of the Reuters Founder Share Company.

The group, run by 15 trustees, holds a single golden share in the company, giving it the power to block any hostile takeover of the firm.




SEE ALSO
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26 Jul 05 |  Business
New sales to lift Reuters revenue
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