Reuters has signed a definitive agreement to sell its soft-dollar execution broker Bridge Trading Company to its New York-based electronic trading subsidiary Instinet for $21.5 million in stock.
Bridge Trading serves more than 500 US institutional clients from regional offices around the country. On average it traded over six million of exchange-listed shares per day in 2004.
Instinet says the acquisition will enable it to grow its client base, increase exchange-listed trading volume and expand its offerings to institutional investors.
Commenting on the acquisition, Mike Plunkett, president, North America, Instinet, says: " The potentially larger pool of exchange-listed liquidity can substantially benefit our more than 1500 institutional clients through improved trade quality."
Phil Lynch, CEO, Reuters Americas, says the deal would give Bridge Trading clients access to a broader trading venue and to liquidity in both listed and OTC stocks.
The deal is subject to regulatory approval and is expected to close within eight weeks.
Reuters acquired Missouri-based Bridge Trading when it bought the assets of Bridge Information Systems in 2001. The sell off is part of Reuters' plans to offload non-core businesses and focus on providing broker-neutral services.
In November last year Reuters dismissed market speculation that it was in talks to sell its Instinet subsidiary but admitted that the business was no longer viewed as a core asset. At the time, rumours of an imminent sale of Instinet had driven Reuters shares up to a seven month high.