Thomson Reuters, Blackstone To Close Financial & Risk Transaction On Oct. 1

(RTTNews) - Thomson Reuters (TRI, TRI.TO) said that the company and private equity funds managed by Blackstone have agreed to close the sale of a 55% interest in the company's Financial & Risk business on October 1, 2018, subject to satisfaction or waiver of customary closing conditions.

The closing of the transaction is not subject to any financing condition. An affiliate of Canada Pension Plan Investment Board and an affiliate of GIC will invest alongside Blackstone. After the closing, the Financial & Risk business will be known as Refinitiv.

Thomson Reuters noted that it will receive about US$17 billion in gross proceeds when the transaction closes. Thomson Reuters plans to return an aggregate of US$10 billion of these proceeds to its shareholders.

Thomson Reuters said it expects to use the remaining proceeds not returned to shareholders to redeem approximately US$4 billion of debt, maintain approximately US$2 billion of cash on its balance sheet to fund focused acquisitions, and utilize approximately US$1 billion to cover transaction-related expenses including cash taxes, pension contributions, bond redemption costs and other fees and outflows related to the transaction.

Separately, Thomson Reuters announced that its Board has authorized the making of a substantial issuer bid/tender offer or SIB pursuant to which the company will offer to purchase from shareholders for cancellation up to US$9 billion of its outstanding common shares.

The SIB will commence today and expire on October 2, 2018, unless extended or withdrawn. The company plans to fund repurchases of shares using a portion of the cash proceeds to be received from the sale of a 55% interest in the company's Financial & Risk business to private equity funds managed by Blackstone for approximately US$17 billion. An affiliate of Canada Pension Plan Investment Board and an affiliate of GIC will invest alongside Blackstone. The F&R Transaction is expected to close on October 1, 2018 and the SIB is conditioned upon the closing.

Thomson Reuters' directors and officers do not plan to tender any shares pursuant to the SIB.

Upon expiry of the SIB, the company will determine the lowest purchase price (which will not be more than US$47.00 per share and not less than US$42.00 per share) that will allow it to purchase the maximum number of common shares properly tendered to the SIB, and not properly withdrawn, having an aggregate purchase price not exceeding US$9 billion.

If common shares with an aggregate purchase price of less than US$9 billion are properly tendered and not properly withdrawn, the company will purchase all shares tendered at US$47.00 per share, the maximum price per share pursuant to the terms of the SIB.