The rumors
were right: Thomson is indeed looking
to buy Reuters. The final price looks like it’s going to be about 700p per
share, or $17.6 billion, and the Reuters "Founders Share" structure,
which prevents hostile takeover bids, will be transplanted into the new Thomson-Reuters.
One way of making the target company more receptive to your bid: promise the
CEO that he’ll be in charge of the merged company. Reuters’ CEO is Tom
Glocer, and he seems positively
giddy about the deal: "I strongly believe that in combining our two
companies we would create a world leader in electronic media and publishing,"
he said in a memo to Reuters staff.
The big question is whether Thomson-Reuters will be a fierce competitor to
Bloomberg, or whether the two companies will settle down into a relatively cozy
duopoly, with every incentive to raise prices and little incentive to cut them.
After all, Bloomberg is famous for growing its market share while never discounting
its eye-wateringly expensive terminals. If Rupert Murdoch gets control of Dow
Jones, maybe he’ll inject a bit more competitive spirit into the financial-data
marketplace. But if he doesn’t, I think the regulators might want to think long
and hard about this proposed deal.