Reuters Takeover Targets
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Created by Barrons
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Date updated:02-24-2007

From 2-26-07 Barron's:

"When Reuters Group reports its 2006 results March 1, it's going to have to do more than reiterate the benefits of cost-cutting or promise to return more cash to shareholders."

"Reuters has to think of acquisitions to grow bigger and faster -- or risk falling prey to a private-equity predator."

"Reuters has evolved from a vendor of news and information to a solutions provider, increasing its influence over the value chain that connects the back and front ends of banking and brokerage...Reuters needs to gain more power over customer desktops so that when, say, two banks merge and jobs are cut, the effect on Reuters' revenue stream is minimal."

Acquisitons are the way to do this and here are 4 logical acquisition targets.

symbol name last price % change open
  • +
  • FDS
    Factset Research
  • $72.35
  • +0.70%
  • $71.85

"FactSet might be the best. With an enterprise value of $2.53 billion, it has delivered operating margins exceeding 20% since 1986 and has a 90%-plus customer- retention rate. Its Nasdaq-listed stock trades at 30 times earnings for 2007, so it's hardly cheap. But FactSet and its products would boost Reuters' franchise in the U.S., where buy-side institutions contribute 75% of FactSet's sales."

People owning FDS also tend to own: CHTRCKSWADBEAKAMALLAMABAMAT

TheStreet.com Rating: B+ What is this?

  • +
  • ITG
    Investment Tec Ne
  • $18.25
  • 0.00%
  • $N/A

"...acquiring Investment Technology Group would be more strategic because its main asset is a broker-neutral trading platform. ITG is mulling setting up an equities trading platform in Europe."

People owning ITG also tend to own: GESMDRSTHJF.PKAATIAPOLBPOPFAST

TheStreet.com Rating: C- What is this?

  • +
  • PSO
    Pearson Plc Ord
  • $13.80
  • 0.00%
  • $N/A

"Interactive Data is another option. There's talk that Pearson might sell its 62% stake in that company, a position currently valued at $1.4 billion. The unit's services cover fixed-income securities and equities, with different products for retail and institutional investors."

People owning PSO also tend to own: ALKSAMATCSCOEBAYETFCGLWJNPR

TheStreet.com Rating: No Rating What is this?

  • +
  • BK
    Bank Of Ny Mellon
  • $26.64
  • +1.29%
  • $26.23

"BNY Convergex is a potential bolt-on that might bolster Reuters' position beyond trading execution and commission management. With 2005 sales of $345 million, it has an independent research platform that might mesh with Reuters' joint venture with Nasdaq."

People owning BK also tend to own: CDISFDXICFJPMMMMPFE

TheStreet.com Rating: D+ What is this?

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