Thomson Reuters to quit London exchange

Posted 06 24 2009 2:57PM

NEW YORK (Reuters) – Thomson Reuters Corp plans to withdraw its shares from the London Stock Exchange, severing a key connection with Reuters' British roots.

The company, formed in 2008 when Canadian data publishing company Thomson Corp bought British news and financial information provider Reuters, said on Monday that it would also remove its shares from the Nasdaq and remain listed on the New York and Toronto exchanges.

While Thomson Reuters still has a big business in London, the merged company has a more balanced global profile than either company had on its own with, big businesses in the United States, Europe and Asia. Chief Executive Thomas Glocer, who is American, has moved his base to New York from London.

Thomson Reuters' London listing had become problematic for the company, said Todd Bourell, a partner at hedge fund ValueAct Capital, which owns 12 million Thomson Reuters shares in London and is one of the company's largest shareholders. Canada's Thomson family is the largest shareholder of Thomson Reuters and holds a 55 percent voting interest.

"The fact that the stock is irrationally undervalued in London is putting a drag on the value of the stock in New York and Toronto," Bourell said.

There had always been a gap between the price in New York and London, and many investors made money by selling their more expensive New York shares and buying cheaper London shares.

Glocer played down concerns that Thomson Reuters could lose any U.K.-based shareholders through the action, noting that only 5 percent of all shareholders are in the United Kingdom. He expressed hope that those shareholders would retain their holdings after the delisting.

"Our shares are now fragmented, divided between North America and London in a way we didn't envision. That's hurting the company because there are investors who would come in but won't," Glocer said in a telephone interview.

The news and information provider said it planned to seek shareholder approval for the delistings on August 7.

The company can save millions of dollars in costs by leaving the London and Nasdaq exchanges, Glocer added.

The departure of Thomson Reuters is a loss for the London Stock Exchange, which has been under pressure in the last few years as smaller rivals have eaten into its share of trading, and larger rivals diversify with trans-Atlantic mergers.

"We are headed towards universal access (to stock trading) that makes multiple listings obsolete," said Diego Perfumo, analyst at Equity Research Desk, an advisory firm specializing in exchanges. "NYSE Euronext provides Thomson the European and U.S. listings, Canada is maintained to honor its origin."

In the United States, the departure of Thomson Reuters from the Nasdaq is also a setback for the exchange. Owned by Nasdaq OMX, the exchange has been fighting NYSE Euronext for listings. Nasdaq has scored victories of its own, landing heavyweight media companies like News Corp and DreamWorks Animation SKG Inc in recent years.

Leaving the London exchange marks a major move away from Reuters' European origins.

The German-born Paul Julius Reuter opened his news and stock quote service in the city in 1851. It was there that he turned Reuters into a global news service, and it was London that gave the outlet a distinctly British tinge. Reuters Group Plc listed its shares on the London exchange in 1984.

Glocer said he understood the value of history but noted that leaving the London exchange does not mean that the company has abandoned one of the world's financial capitals.

"In a global electronic world where shares are trading in ones and zeros ... where we trade our shares is, to me, plumbing," said Glocer. "I think we shouldn't get too hung up ... London is still the second-largest center that we've got."

The company's shares closed down 78 cents at C$33.53 on the Toronto Stock Exchange. They closed down 94 cents at $29.08 on the New York Stock Exchange. There was minimal trading after the news.