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Blackstone may buy majority stake in key Thomson Reuters unit for $17 bn

If the board agrees to a deal with Blackstone, it would represent the biggest shake-up of Thomson Reuters since it was formed a decade ago

Reuters  |  London 

Blackstone
Blackstone

US private equity firm Group LP is in advanced talks to buy an approximate 55 per cent stake in the Financial and Risk business of Corp for more than $17 billion, three sources familiar with the matter said on Monday.

Thomson Reuters' board, the sources said, is expected to meet on Tuesday to discuss Blackstone's all-cash offer for the F&R business, which supplies news, data and analytics to banks and investment houses around the world. The unit contributes more than half of Thomson Reuters' annual revenues.

said in a statement late on Monday that "it is in advanced discussions with regarding a potential partnership in its F&R business." The company gave no more details. A spokeswoman for declined to comment.

If the board agrees to a deal with Blackstone, it would represent the biggest shake-up of since it was formed a decade ago by Thomson Corp's acquisition of Group Plc. Canada's Thomson bought London-based for 8.7 billion pounds in 2008, worth $17 billion at the exchange rate at the time.

Under the terms of the offer, would retain a 45 percent stake in the F&R business as part of a partnership with the US buyout firm, according to the sources. was unable to determine who would lead the newly formed company.

would hold on to its news service, Reuters, along with its Legal and Tax and Accounting divisions. is expected to continue to supply news to F&R's flagship desktop product, Eikon, as well as to other products, though the details of the arrangement could not be determined.

The sources cautioned that a deal had not been finalised and could still fall apart.

They declined to be identified because the negotiations are confidential.

It is unclear how the proposed deal would be viewed by trustees of the Founders Share Co, which was set up to oversee Reuters' editorial independence when the company was first publicly listed in the 1980s.

The trustees approved Thomson's deal for a decade ago. Founders Share Co-Chairman Kim Williams did not respond to requests for comment.

Blackstone's investment, if finalized, will put the buyout firm in direct competition with Bloomberg LP as well as News Corp's Dow Jones division in selling data services, analytical and trading tools to Wall Street. has some experience in the information business. It bought Ipreo, which sells specialist software for tracking capital markets' activities in 2014 for just under $1 billion.

STREAMLINING

Canada's Thomson family controls more than 63 per cent of shares through Woodbridge Co Ltd. The news and data provider has a market value of about $31 billion and its shares trade on the New York and Toronto stock exchanges.

Since its creation in 2008, has carried out more than 200 acquisitions, but has struggled to integrate some of the assets it took on, especially in its F&R division, which was hit hard by the financial crisis.

Growth in the business has slowed as banks and brokerages shrank in the face of weak trading. But amid tougher regulations around risk-taking, the regulation and compliance business has been a bright spot.

To streamline its business, has reduced the number of products within its F&R segment while shrinking its workforce.

The company has also sought to sell non-core assets, including its intellectual property and science business, which it sold to private equity firms Onex Corp and Baring Private Equity Asia for $3.55 billion in 2016.

Shares of have fallen 9 per cent over the past 12 months compared to a 3 per cent rise in the Toronto Stock Exchange's main index in the same period.

First Published: Tue, January 30 2018. 10:28 IST
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