Reuters Moves Forward With Partial Float of Instinet
A WSJ.COM News Roundup
LONDON -- Reuters Group PLC, moving ahead with plans to take its Instinet electronic trading unit public, said Thursday that it will sell a $450 million stake by the middle of the year.
The number of shares and estimated price range weren't disclosed in the filing with the U.S. Securities and Exchange Commission for the proposed initial public offering on the Nasdaq Stock Market.
The company plans to use the proceeds to repay about $200 million of debt owed to Reuters, with the balance to be used for general purposes, including possible acquisitions and investments in other companies.
Following the IPO, Reuters will continue to hold a substantial majority of Instinet's common stock, the company said. Reuters is based in London and its Instinet subsidiary has its headquarters in New York.
Credit Suisse First Boston Inc., Deutsche Banc. Alex Brown, Bear Stearns & Co., JP Morgan Securities, Merrill Lynch & Co., Salomon Smith Barney Inc. and WR Hambrecht & Co. were listed as underwriters for the offering.
The news and information company first said in February 2000 that an IPO was a strategic option under consideration for the subsidiary, and confirmed in October it would proceed with the plan.
Instinet is an electronic brokerage firm best known for operating the largest electronic communications network, or ECN, for trading U.S. stocks, primarily those on the Nasdaq Stock Market. An ECN is a screen-based order-matching system through which individuals and institutions can trade directly without a market maker or floor specialist as intermediary.
In recent years, Instinet's ECN has lost market share to younger rivals. To diversify, the company has built up an institutional sales force to compete with the capital markets operations of Wall Street investment banks and expanded into foreign markets
Instinet has slimmed down a bit. In the face of a slump in the retail brokerage industry, Reuters in December decided to abandon plans to launch Instinet.com, an online brokerage site geared towards individual investors.
Reuters said the closure, which affected 80 employees, was a reaction to "high costs of customer acquisition, lower levels of trading activity, slowing rate of new customer growth, and substantial declines in the value of online brokerage businesses." |
