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UPDATE 2-Thomson Reuters shareholders approve UK delisting

Published 08/07/2009, 01:29 PM
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* Company to delist from London, Nasdaq; remain on NYSE, TSX

* Delistings to take place Sept. 10

* London share discount now 2 percent vs 14 percent before plan

* UK shareholders now hold just 5 percent of total shares

(Adds details on vote, background)

By Georgina Prodhan

LONDON Aug 7 (Reuters) - Shareholders in Thomson Reuters approved its delisting from the London Stock Exchange on Friday, distancing news and financial information provider Reuters further from its British roots.

Thomson Reuters, formed in 2008 when Canadian data publisher Thomson Corp bought Reuters, has said it wants to simplify its capital structure and eliminate the persistent discount at which the London shares have traded to the Canadian shares.

It will also delist from Nasdaq, remaining on the main New York and Toronto exchanges.

"I expect that a more straightforward capital structure will ensure that the focus of investors will remain firmly on the company itself and not on its capital structure," Chief Executive Tom Glocer told shareholders in London.

Some 97.4 percent of shareholders of Thomson Reuters PLC voted for the motion to unify the company's dual-listed structure and 99.6 percent of shareholders of Thomson Reuters Corp backed the motion. Fewer than 100 shareholders attended the London meeting, with similar numbers in Toronto.

The Canadian vote was decided by Thomson's family holding company, Woodbridge, which owns about two-thirds of the outstanding shares in Thomson Reuters Corp and had already committed to vote in favour of the move.

Not all shareholders agreed with the decision. "This country is a link to Europe. It looks like everything is going to shift to America and I'm a bit nervous about that," Allan Ferguson, who holds about 686 Thomson Reuters shares, told the London meeting. "I feel that we're just going to be another outpost."

Glocer has moved his base to New York from London, which remains the company's second-biggest base. Thomson Reuters made 58 percent of its revenue in the Americas, 32 percent in Europe, the Middle East and Africa and 10 percent in Asia last year.

German-born Paul Julius Reuter opened his news and stock-quote service in London in 1851, where it became a global news service. Reuters listed its shares in London in 1984.

MIND THE GAP

Thomson Reuters' London shares have traded at a discount to the Canadian shares since the merger. The gap has narrowed to 2 percent from 13.6 percent before the company announced its plan in June to delist the London shares.

Thomson Reuters says UK shareholders own only about a quarter of its London-listed shares, down from about 58 percent in 2007, and hold only 5 percent of the company's total outstanding shares.

Some analysts say London investors were influenced by memories of Reuters' poor performance during the last downturn, and were not convinced of the more defensive qualities of Thomson's products aimed at legal, health and tax professionals.

On Thursday, Thomson Reuters reported a better-than-expected quarterly profit helped by cost cuts, and said it expected 2009 revenue to grow as the financial industry recovered and banks started hiring again.

Credit Suisse, Bernstein and RBC raised their target price on the shares on Friday, but Jefferies downgraded the stock, saying it expected some UK shareholders to take profits rather than convert into Canadian shares.

Shareholders in Thomson Reuters PLC are entitled to receive one Thomson Reuters Corp share for every PLC share they hold, while holders of American Depository Shares will receive six Thomson Reuters Corp shares per ADS.

The delistings are expected to take place on Sept. 10, subject to UK court approval. (Additional reporting by Euan Rocha in Toronto) (Editing by Erica Billingham)

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