Associated Press
Reuters Shares Up on Instinet Sale Rumors
Thursday November 18, 1:22 pm ET
Reuters Shares Up on Speculation Its Instanet Group Is Up for Sale
LONDON (AP) -- Shares in Reuters Group PLC rose Thursday on speculation that its part-owned stock-trading network Instinet Group Inc. is up for sale.
Analysts said media reports that New York-based Instinet, which is 67 percent owned by Reuters, had retained UBS for an auction had rejuvenated long-running questions about the company's future.
In early afternoon trading on the Nasdaq Stock Market, U.S.-traded Reuters shares were up $1.52, or 3.5 percent, at $44.40, while Instinet shares surged 49 cents, or 8.5 percent, to $6.24. In London, Reuters shares closed 3.6 percent higher at 400.75 pence ($7.42.)
London-based Reuters declined to comment on "rumor and speculation" but highlighted a statement made by chief executive officer Tom Glocer in September: "In short to medium-term, we're doing a pretty good job at Instinet and on balance, there is more upside than downside so I prefer to continue to work that asset a little bit longer," he said then.
Instinet, based in New York, also declined to comment. UBS had no immediate comment.
Meg Geldens, an analyst with Investec Securities in London, said the shares were rising as traders factored in the benefits for Reuters of a sale.
"If Instinet is sold, Reuters will bank about 600 million pounds ($1.1 billion) and that will move it into a net cash position," Geldens said.
A strong balance sheet brings up the potential of buybacks or a cash return, she said.
Geldens said the bounce in Reuters shares was being aided by an announcement from the company Thursday that it is launching new electronic trading capabilities
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