Reuters In Discussions With BT Over Long Term Network Services Agreement And Sale Of Radianz

Reuters (RTR:LSE) is in exclusive discussions with BT (BT.A:LSE) to secure a long-term agreement for the provision of network services. This would involve the sale of Radianz, the financial extranet venture, to BT. Both the commercial arrangements and the sale are subject to due diligence, regulatory approvals and the negotiation of definitive agreements. These transactions are expected to complete during the first quarter of 2005.

As a prerequisite to this agreement, Reuters has agreed to acquire Equant's (EQU: Euronext Paris) 49% interest in Radianz for $110m in cash together with the release of future funding obligations. This will bring an end to the joint venture arrangements between Reuters and Equant that have created a high quality extranet for the financial services industry with a fast growing client base. The purchase of Equant’s shareholding is subject to regulatory approval and is expected to complete in the fourth quarter of 2004. Business will continue as usual for all parties involved during this period.

Tom Glocer, CEO of Reuters, said: “This is a significant next step in the Fast Forward transformation program at Reuters. Radianz has established itself as a first class global financial extranet supplier for Reuters and thousands of other demanding customers in the financial services industry. As part of BT, Radianz would continue to be our preferred network communications supplier. By combining Radianz with BT, Reuters and our customers would benefit from a greater range of high quality networking options, providing increased flexibility and enabling cost efficiencies.”

Ben Verwaayen, CEO of BT said: "We are truly excited to have been chosen to work with Reuters to support its ongoing transformation programme. BT has unrivalled experience of helping global organisations take advantage of the digital networked economy and this is an important endorsement both of our technical excellence and of our ability to deliver complex projects on a large scale. The proposed acquisition of Radianz would significantly enhance our strong IT and Networking services offer to the financial services industry.”

Howard Edelstein, President and CEO of Radianz, said: “A change in ownership would be a positive and exciting development in Radianz's evolution. With the support of our shareholders, we have developed a robust platform and established a well known and respected brand in the global financial services industry. Radianz welcomes this development, as the appeal of Radianz would further increase by becoming a part of BT, a company which also shares Radianz's vision of an independent market infrastructure.”

Reuters will continue to equity account for the 51% of Radianz that it already owns, but will treat the newly acquired 49% stake as an asset held for resale.