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Thomson family replaces 'consigliere'

Canada's Thomson family, controlling owners of Thomson Reuters, on Thursday promoted a long-serving lieutenant to run its private investment holding company Woodbridge.

David Binet, pictured, Woodbridge chief operating officer and chairman of the Thomson Reuters Foundation, will step up to become the company’s president on 1 January. A former Canadian Press wire service reporter who became a lawyer and joined Woodbridge in 1999, he also becomes a director of Thomson Reuters.

Binet replaces Geoffrey Beattie, described as “consigliere” to Canada’s richest family whose fortune was estimated last week at C$20.1 billion. Beattie, a 15-year Woodbridge veteran, was an architect of the Thomson Corporation’s $17 billion takeover of Reuters in 2008. It subsequently took a $3 billion writedown on the deal, which gave the Thomson family 55 per cent of the merged business.

Beattie will continue to work as a deputy chairman of Thomson Reuters. The Financial Times said he was instrumental in the sudden management shake-up last year in which chief executive Tom Glocer and others stepped down or were fired in a series of shake-ups in executive ranks.

“Thomson Reuters is extremely fortunate to have David Binet join the Board of Directors,” David Thomson, chairman of Thomson Reuters and of Woodbridge, said in a statement. “His experience working closely with the company for many years positions David well to provide valuable counsel moving forward.”

The FT said news of the change comes against the backdrop of sluggish performance at Thomson Reuters, which has struggled since the merger. In the most recent quarter, operating profit fell 15 per cent, with declines in trading revenues and margins in the company’s financial division offsetting growth in other businesses.

“Woodbridge has experienced a period of growth and diversification under Geoff’s tenure, including the acquisition of Reuters,” the Thomson family wrote in a statement to its employees. “Woodbridge is strong in financial terms and well-positioned to serve its family shareholders. Geoff has also been an ambassador for Woodbridge through his outside commitments in the business and not-for-profit sectors.” The family added that the ongoing success of Thomson Reuters was critical to the success of Woodbridge.

Tim Casey, a media analyst at Bank of Montreal’s investment division, said Beattie’s departure may be a signal of growing frustration within the Thomson family over its Thomson Reuters investment, which has underperformed since the merger and has been losing ground to rival Bloomberg.

Thomson Reuters shares have fallen about 25 per cent since the deal was closed and now trade on the New York and Toronto stock exchanges for about $27.

“We suspect this latest leadership change reflects growing impatience from the family regarding shareholder value,” Casey wrote in a note. “That said, given the current macro environment, particularly in financial services, there does not seem to be obvious value creation initiatives from a corporate perspective.”

Analysts who follow the company have shown little enthusiasm for its shares. Sixteen have Hold ratings, while five have Buy and three advise selling. ■