Reuters is selling off its 34.2% stake in French trading technology vendor GL Trade. The divestment will be executed through three linked transactions with private investors, European exchange Euronext and GL Trade shareholders.
In a statement released after the market close in London yesterday, the news and information group says Euronext, which is already a majority shareholder in the Paris-based firm, will purchase 1,033,828 shares, - 10% of Reuters' stake in GL Trade - for EUR26 per share in cash.
GL Trade will buy an eight per cent stake - 827,063 shares - from Reuters under its share buy-back programme, also for EUR26 per share in cash.
At that price, Reuters' total stake would be worth about EUR92m, but the group says it will also sell 1,674,109 shares - 16.2% of GL Trade's current share capital - in a private placement to institutional investors outside the US, for an undisclosed price. A further 3.4% may be placed by GL Trade founders in the event of significant demand.
Reuters says its carrying value for the shares is approximately £12 million.
David Grigson, Reuters chief financial officer, says the company's exit from GL Trade is consistent with previously announced plans to rationalise the group's portfolio: "Reuters expects to make an excellent financial return on this investment and we intend to use any sale proceeds to pay down debt."
Shares in GL Trade were worth EUR28.00 this morning, down from an overnight close of EUR28.62.
GL Trade has also announced it is acquiring Iris Group, a Dutch provider of screen-based trading and decision support software, for an undisclosed sum.
Iris specialises in options market making and currently has 15 clients. The company had a turnover of EUR1.3m in 2003. Following the acquisition all Iris staff will join GL Trade.
Vincent Burzynski, GL Trade's product director, says: "This acquisition confirms our ambitions in the market making field. Iris' derivatives products, which so far have been limited to the local Dutch market, will now benefit from the full range of market access and the international sales force offered by the GL Trade Group."