Reuters expects to return an amount equivalent to the approximately $1 billion net proceeds of this disposal to shareholders. The timing and mechanism of this return will be communicated at or prior to the completion of the Instinet Group sale, which is subject to regulatory approvals and other completion conditions. All parties will make efforts to complete the transaction by year-end.
The disposal of its stake in Instinet Group will be another significant step in Reuters programme to become a simpler, more coherent business. It also positions Reuters more clearly in the strategically important electronic transactions markets. By reinforcing its position as a neutral distributor of transactions facilities, Reuters is becoming a natural partner for customers aiming to reach a larger audience with their trading applications.
Tom Glocer, Reuters Chief Executive Officer, said: “I am very pleased with the sale of Instinet announced today. The electronic markets for trading equities will benefit from consolidation, Reuters shareholders will see a significant return of cash and Instinet will become core to the operations of the new owners. At Reuters, we will continue our strategy of providing clients with access to multi-asset electronic transaction services on a fast, global and neutral basis.”
Instinet Group’s 2004 profit before tax under UK GAAP was £56 million and its net assets at 31 December 2004 were £524 million on the same basis.
Included in the approximately $1 billion net cash proceeds Reuters expects to receive are those generated from Instinet Group’s sale of its Lynch, Jones & Ryan, Inc. subsidiary to The Bank of New York, also announced today. In connection with this transaction, Reuters has agreed to assume certain indemnity obligations of Instinet Group in the sale agreement, effective only upon completion of the sale of all or substantially all of the stock or assets of Instinet Group.
