Thomson Reuters to end London share listing - FT

The board discussed the decision on Monday afternoon, the newspaper said in a report from New York. It is subject to shareholder and court approval.

Thomson Reuters needs 75 per cent majority approval from shareholders to replace the current UK-listed shares and their related US-listed American Depositary Receipts with a single Toronto listing.

The FT said the switch will be conducted through a scheme of arrangement in a manner designed to avoid tax penalties for shareholders and should be completed by the end of September if shareholders and courts give their approval.

It would end a period marked by large valuation gaps between the London and Toronto listings since the dual structure was put in place when Thomson took over Reuters in April 2008.

The UK shares currently trade 10 per cent below the North American stock and 95 per cent of the company is now held by non-UK shareholders, the FT said.

“By improving liquidity in the Canadian stock, which includes most of the Thomson family’s controlling 55 per cent stake, the group hopes to improve its appeal to investors and its chances of raising capital if needed in future,” the FT said.

“The company has been conscious of the long history of Reuters in London, which dates back to Paul Julius Reuter’s pioneering use of carrier pigeons and submarine telegraph cables in the 1850s.

“However, people close to the company told the Financial Times that the change would not affect its sizeable Thomson Reuters markets business in London, nor headcount at its professional division…”

The company could save about $10 million in accounting, legal and other costs associated with the UK listing, they estimated.

The FT said that just 25 per cent of the London listed shares are now in the hands of UK institutions, down from over 50 per cent, of which roughly half were active investors and the other half index tracking funds.

The group expects index trackers and some UK active investors to come out of the stock, but its greater weighting in the Toronto index should in part offset any flow-back issues. ■