Thomson Reuters Corp. on Tuesday launched a US$9-billion share buyback, sending its shares higher, and said it would complete the sale of a majority stake in its Financial & Risk unit to Blackstone Group LP on Oct. 1.
Shares in Thomson Reuters, which had been suspended prior to the announcement, were trading at $58.03, up 3.6 per cent at 1:30 p.m. EDT in Toronto, having earlier hit $58.50 after trading recommenced, their highest level since the deal was announced on Jan. 30.
The tender offer, which expires on Oct. 2, has been priced at US$42 to US$47 a share, an 11.5-per-cent premium to the stock’s average price over the past 20 trading days, the company said in a statement. Thomson Reuters’ U.S.-listed shares were trading at US$44.94, up 3.9 per cent at 1:30 p.m. EDT.
The news and information provider had previously said it expected to complete the deal, which values the business at about US$20-billion, in the fourth quarter of 2018.
The company reiterated its guidance that it will receive about US$17-billion in gross proceeds when the deal closes, out of which it plans to return US$10-billion to shareholders.
As part of that process, the company said up to US$9-billion will be returned to shareholders through a tender offer for shares, which commences on Tuesday.
From the remainder of the proceeds, the company said it will redeem US$4-billion of debt, keep US$2-billion of cash on its balance sheet and use US$1-billion to cover expenses related to the transaction.
Thomson Reuters said The Woodbridge Company Ltd., the Thomson family’s investment company, would participate in the buyback and retain a 64-per-cent ownership in the company.