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Reuters confirms it has become takeover target

The London-based company says it had received a preliminary approach from a third party, which may or may not lead to an offer being made for the group.

business Updated: May 04, 2007 19:51 IST

Reuters, the international news and financial information service, confirmed on Friday that it had become a takeover target.

The London-based company said it had received a "preliminary approach from a third party, which may or may not lead to an offer being made for the group."

Shares in the firm soared by almost 19 per cent as investors cheered the prospect of consolidation in the sector.

But Reuters said there was no certainty that an offer would be made.

Reuters, valued at around 6.2 billion pounds ($12.4 billion), saw its shares rise more than 8 per cent on earlier speculation that it could receive a bid from Canada's Thomson Corporation.

However, a takeover of Reuters would not be easy, due to special measures set up to ensure its independence as a news and information service and to prevent the company falling under the control of specific individuals or interests.

Reuters said in a statement that even if an offer was made, there could be no certainty that the necessary approvals, including those required under the Reuters constitution, would be received.

The preliminary approach comes just days after Rupert Murdoch's News Corporation made an initial bid of 2.5 billion pounds for Dow Jones, the owner of the Wall Street Journal.

The Bancroft family, who are the controlling shareholders of the company, rejected the offer.