Reuters trust to give green light to £8.8bn Thomson bid

The Reuters Founders Share Company, the independent body that acts as guardian to the editorial independence of the media and financial information group, is to give its blessing to the company's proposed £8.8bn takeover by its Canadian rival Thomson.

It is believed that the trust, which is made up of 15 independent executives, headed by the Swedish industrialist Pehr Gyllenhammar, is satisfied that the takeover of Reuters will not jeopardise its principles of journalistic independence.

The trust's backing of the takeover removes one of the last significant stumbling blocks to the deal. It has a "golden share" which it can employ to block any takeover of Reuters.

A banker with links to the trust told The Independent on Sunday: "It looks like this deal is now almost certain to go ahead." It is believed a formal announcement by Thomson and Reuters could be made as early as this week.

Thomson has already pledged that the trust's principles will be adhered to. It has also promised that an independent process for appointing trustees will remain intact.

Under the proposed deal, which will see Thomson-Reuters listed in both Toronto and London, Reuters shareholders will receive 352.5p cash plus 0.16 Thomson shares for each share they hold in the UK company.

Reuters' investors will end up with 24 per cent of the enlarged company. The Thomson family will retain a majority stake in the business, with a 53 per cent shareholding. Remaining Thomson investors will hold 23 per cent.

However, the National Union of Journalists is concerned that the deal, which will realise more than £250m in cost savings, will result in hundreds of redundancies. Head office, sales and back office staff are also expected to suffer cutbacks as employees with overlapping functions lose their jobs.

Reuters currently employs 16,800 staff in 200 offices worldwide, while Thomson's financial arm has 9,300 employees in 37 countries.

The merger between Thomson and Reuters could also trigger a lengthy antitrust investigation on both sides of the Atlantic. The combined group would control 34 per cent of the financial data market. Typically in such takeover situations, a 30 per cent share is sufficient to alert competition watchdogs. Bloomberg, the only other significant player in the market, has a 33 per cent share.

Regulators could insist that a combined Reuters-Thomson makes some disposals to satisfy competition concerns.

Tom Glocer, the chief executive of Reuters, will retain his position in the enlarged group. Mr Glocer, who became Reuters' chief executive in 2001, is expected to pocket about £35m from the deal. He has nearly 10 million share options and owns a further 401,345 shares.

Not only will Glocer take the top seat at the new company, but Reuters will have a further five directors on the board. Its chairman Niall FitzGerald is expected to become deputy-chairman of the new group, with David Thomson, the current chairman of Thomson, retaining his position as head of the board.

Analysts have expressed concerns that the Thomson family's control of the combined group could adversely affect its share price. Other family-controlled businesses, such as Dow Jones and The New York Times, have tended to perform badly when compared with the wider market.

A tie-up between Reuters and Thomson will mean that both of the major suppliers of financial data will be controlled from North America - a scenario that is seen as unwelcome in some quarters of the City.

Analysts believe there is little chance of a rival bid emerging for Reuters, given the trust's power to veto any deal.

"There appears to be only one suitor in town," said the banker.