Paul Julius Reuter
How Reuters convinced unions about Geneva HQ, by Michael Nelson
Saturday 27 June 2009
A Reuters plan to relocate to Geneva from London 30 years ago had nothing to do with internationalism but with British trade unionism, Michael Nelson, general manager at the time, said.
The company devised a stratagem to convince the unions that it would leave London, its headquarters since Paul Julius Reuter founded the business in 1851, if it could not get a deal with them during what became known as the 1979 “winter of discontent”.
The plan worked, and Reuters remained at 85 Fleet Street.
On Wednesday, the Financial Times reported in an article on Thomson Reuters’ decision to end trading of its shares on the London Stock Exchange: “If there is concern about the decision in London, it won't be on patriotic grounds. Reuters had been a global company for years before the Thomson deal (although according to a history of the group, Peter Job, managing director, dismissed a 1980 suggestion to relocate its HQ to Geneva as "pallid internationalism").”
The FT’s Lombard columnist, publishing Nelson’s clarification under the headline “Reuters’ Swiss solution”, said on Saturday:
“Thomson Reuters’ decision to scrap its London listing should not upset patriots because Reuters has always been a global company. But my parenthetical reference this week to an abortive plan to move the group’s headquarters to Geneva – mentioned in Donald Read’s history of Reuters, The Power of News – prompted a fascinating clarification from Michael Nelson, who was general manager of Reuters at the time.
“He says this had ‘nothing to do with internationalism but with British trade unionism’. In 1979, the year of the ‘winter of discontent’, Mr Nelson suggested Reuters build a data centre in the Swiss city as an alternative to London if a deal could not be struck with the unions.
“Union representatives were periodically flown out, given a tour of the empty building, ‘a good lunch on Lake Geneva’, and a warning ‘that if we could not get what we wanted in London, we would move to Geneva’.
“The ploy worked and, as Reuters expanded, the building was used to serve continental clients, eventually becoming the headquarters for Europe.”
Five years earlier, union officials and Reuters’ union representatives had been flown at company expense to study video editing in operation in New York. Kevin Garry, in charge of staff relations, “hinted that, if London refused to follow New York, the whole Fleet Street editorial operation might be moved outside the United Kingdom”, according to the company’s official history. Agreement was reached in mid-1975 but the introduction of video editing in London with journalists’ right to by-pass telegraphists and transmit news directly to line was delayed for technical reasons until the end of 1979.
Unions are again threatening strikes and (erroneous) parallels are being drawn with the situation 30 years ago, the FT said. But the story is a timely reminder of how much heavier the pressure was in the late 1970s; of the lengths employers went to in order to hedge their bets; and of how Reuters, a media pioneer in so many other ways, came close to showing the way forward to Eddie Shah and Rupert Murdoch. As Mr Nelson points out: “Geneva was not Reuters’ Wapping, but might have been.”
● SOURCE Financial Times
The company devised a stratagem to convince the unions that it would leave London, its headquarters since Paul Julius Reuter founded the business in 1851, if it could not get a deal with them during what became known as the 1979 “winter of discontent”.
The plan worked, and Reuters remained at 85 Fleet Street.
On Wednesday, the Financial Times reported in an article on Thomson Reuters’ decision to end trading of its shares on the London Stock Exchange: “If there is concern about the decision in London, it won't be on patriotic grounds. Reuters had been a global company for years before the Thomson deal (although according to a history of the group, Peter Job, managing director, dismissed a 1980 suggestion to relocate its HQ to Geneva as "pallid internationalism").”
The FT’s Lombard columnist, publishing Nelson’s clarification under the headline “Reuters’ Swiss solution”, said on Saturday:
“Thomson Reuters’ decision to scrap its London listing should not upset patriots because Reuters has always been a global company. But my parenthetical reference this week to an abortive plan to move the group’s headquarters to Geneva – mentioned in Donald Read’s history of Reuters, The Power of News – prompted a fascinating clarification from Michael Nelson, who was general manager of Reuters at the time.
“He says this had ‘nothing to do with internationalism but with British trade unionism’. In 1979, the year of the ‘winter of discontent’, Mr Nelson suggested Reuters build a data centre in the Swiss city as an alternative to London if a deal could not be struck with the unions.
“Union representatives were periodically flown out, given a tour of the empty building, ‘a good lunch on Lake Geneva’, and a warning ‘that if we could not get what we wanted in London, we would move to Geneva’.
“The ploy worked and, as Reuters expanded, the building was used to serve continental clients, eventually becoming the headquarters for Europe.”
Five years earlier, union officials and Reuters’ union representatives had been flown at company expense to study video editing in operation in New York. Kevin Garry, in charge of staff relations, “hinted that, if London refused to follow New York, the whole Fleet Street editorial operation might be moved outside the United Kingdom”, according to the company’s official history. Agreement was reached in mid-1975 but the introduction of video editing in London with journalists’ right to by-pass telegraphists and transmit news directly to line was delayed for technical reasons until the end of 1979.
Unions are again threatening strikes and (erroneous) parallels are being drawn with the situation 30 years ago, the FT said. But the story is a timely reminder of how much heavier the pressure was in the late 1970s; of the lengths employers went to in order to hedge their bets; and of how Reuters, a media pioneer in so many other ways, came close to showing the way forward to Eddie Shah and Rupert Murdoch. As Mr Nelson points out: “Geneva was not Reuters’ Wapping, but might have been.”
● SOURCE Financial Times
Reuters' many flags - FT
Wednesday 24 June 2009
Thomson Reuters’ decision to end its London Stock Exchange listing will deny British index funds and those institutions with an outdated mandate to invest only in UK-listed companies the opportunity to share in future growth of the business, the Financial Times said on Wednesday.
Something has gone a bit awry when UK investors keep their exposure to London-listed Kazakh miners that are part of the FTSE 100 index but lose their stake in a global media business with deep roots in Britain, it said in a report under the headline “Reuters' many flags”.
But Thomson Reuters’ experience does not necessary rule out a dual-listed structure the next time somebody wants to mount a cross-border takeover using shares, rather than cash, the FT said.
Companies as diverse as Thomson Reuters' competitor Reed Elsevier, cruise company Carnival, and miner Rio Tinto maintain a dual listing.
“But the structure is an impediment when raising funds - or defending against a hostile bid - it imposes an additional running cost ($10 million a year in Thomson Reuters' case), and it adds complexity when simplicity is in fashion.”
The FT quoted a 1915 leaflet celebrating the 50th anniversary of Reuter's Telegram Company: "Reuter's Agency has always been recognised as a British institution representing the English point of view. [Its managing director] is in all respects an Englishman. The Directors, the Editorial Staff, and the correspondents are British pure and simple, and so, with the exception of a score, are the 1,200 shareholders."
Reuters once had to defend itself against allegations of undue German influence during the First World War, the FT said. “Times have changed. No one will accuse Thomson Reuters of treasonable behaviour for ending its London listing. The media group has recognised the inevitable reality and UK-based shareholders have voted with their feet. Since last year's deal with Canada's Thomson, the proportion of Thomson Reuters PLC's shares held in London has dropped from 58 per cent to less than 25 per cent. The balance of shareholder power has inexorably shifted to New York and Toronto.
“If there is concern about the decision in London, it won't be on patriotic grounds. Reuters had been a global company for years before the Thomson deal (although according to a history of the group, Sir Peter Job, managing director, dismissed a 1980 suggestion to relocate its HQ to Geneva as "pallid internationalism").”
The FT noted that “Paul Julius Reuter, the agency's founder, had two names (he was born Israel Beer Josaphat), two nationalities (German and English) and two religions (Jewish and Christian), so you wouldn't bet against Thomson Reuters adding another listing in future (Shanghai, perhaps). But, barring takeover or break-up, London is, regrettably, unlikely to be one of them.”
● SOURCE Financial Times
Something has gone a bit awry when UK investors keep their exposure to London-listed Kazakh miners that are part of the FTSE 100 index but lose their stake in a global media business with deep roots in Britain, it said in a report under the headline “Reuters' many flags”.
But Thomson Reuters’ experience does not necessary rule out a dual-listed structure the next time somebody wants to mount a cross-border takeover using shares, rather than cash, the FT said.
Companies as diverse as Thomson Reuters' competitor Reed Elsevier, cruise company Carnival, and miner Rio Tinto maintain a dual listing.
“But the structure is an impediment when raising funds - or defending against a hostile bid - it imposes an additional running cost ($10 million a year in Thomson Reuters' case), and it adds complexity when simplicity is in fashion.”
The FT quoted a 1915 leaflet celebrating the 50th anniversary of Reuter's Telegram Company: "Reuter's Agency has always been recognised as a British institution representing the English point of view. [Its managing director] is in all respects an Englishman. The Directors, the Editorial Staff, and the correspondents are British pure and simple, and so, with the exception of a score, are the 1,200 shareholders."
Reuters once had to defend itself against allegations of undue German influence during the First World War, the FT said. “Times have changed. No one will accuse Thomson Reuters of treasonable behaviour for ending its London listing. The media group has recognised the inevitable reality and UK-based shareholders have voted with their feet. Since last year's deal with Canada's Thomson, the proportion of Thomson Reuters PLC's shares held in London has dropped from 58 per cent to less than 25 per cent. The balance of shareholder power has inexorably shifted to New York and Toronto.
“If there is concern about the decision in London, it won't be on patriotic grounds. Reuters had been a global company for years before the Thomson deal (although according to a history of the group, Sir Peter Job, managing director, dismissed a 1980 suggestion to relocate its HQ to Geneva as "pallid internationalism").”
The FT noted that “Paul Julius Reuter, the agency's founder, had two names (he was born Israel Beer Josaphat), two nationalities (German and English) and two religions (Jewish and Christian), so you wouldn't bet against Thomson Reuters adding another listing in future (Shanghai, perhaps). But, barring takeover or break-up, London is, regrettably, unlikely to be one of them.”
● SOURCE Financial Times
Thomson Reuters to end London share listing - FT
Monday 22 June 2009
Thomson Reuters has decided to end the London listing for its shares, the Financial Times reported.
The board discussed the decision on Monday afternoon, the newspaper said in a report from New York. It is subject to shareholder and court approval.
Thomson Reuters needs 75 per cent majority approval from shareholders to replace the current UK-listed shares and their related US-listed American Depositary Receipts with a single Toronto listing.
The FT said the switch will be conducted through a scheme of arrangement in a manner designed to avoid tax penalties for shareholders and should be completed by the end of September if shareholders and courts give their approval.
It would end a period marked by large valuation gaps between the London and Toronto listings since the dual structure was put in place when Thomson took over Reuters in April 2008.
The UK shares currently trade 10 per cent below the North American stock and 95 per cent of the company is now held by non-UK shareholders, the FT said.
“By improving liquidity in the Canadian stock, which includes most of the Thomson family’s controlling 55 per cent stake, the group hopes to improve its appeal to investors and its chances of raising capital if needed in future,” the FT said.
“The company has been conscious of the long history of Reuters in London, which dates back to Paul Julius Reuter’s pioneering use of carrier pigeons and submarine telegraph cables in the 1850s.
“However, people close to the company told the Financial Times that the change would not affect its sizeable Thomson Reuters markets business in London, nor headcount at its professional division…”
The company could save about $10 million in accounting, legal and other costs associated with the UK listing, they estimated.
The FT said that just 25 per cent of the London listed shares are now in the hands of UK institutions, down from over 50 per cent, of which roughly half were active investors and the other half index tracking funds.
The group expects index trackers and some UK active investors to come out of the stock, but its greater weighting in the Toronto index should in part offset any flow-back issues.
● SOURCE Financial Times
The board discussed the decision on Monday afternoon, the newspaper said in a report from New York. It is subject to shareholder and court approval.
Thomson Reuters needs 75 per cent majority approval from shareholders to replace the current UK-listed shares and their related US-listed American Depositary Receipts with a single Toronto listing.
The FT said the switch will be conducted through a scheme of arrangement in a manner designed to avoid tax penalties for shareholders and should be completed by the end of September if shareholders and courts give their approval.
It would end a period marked by large valuation gaps between the London and Toronto listings since the dual structure was put in place when Thomson took over Reuters in April 2008.
The UK shares currently trade 10 per cent below the North American stock and 95 per cent of the company is now held by non-UK shareholders, the FT said.
“By improving liquidity in the Canadian stock, which includes most of the Thomson family’s controlling 55 per cent stake, the group hopes to improve its appeal to investors and its chances of raising capital if needed in future,” the FT said.
“The company has been conscious of the long history of Reuters in London, which dates back to Paul Julius Reuter’s pioneering use of carrier pigeons and submarine telegraph cables in the 1850s.
“However, people close to the company told the Financial Times that the change would not affect its sizeable Thomson Reuters markets business in London, nor headcount at its professional division…”
The company could save about $10 million in accounting, legal and other costs associated with the UK listing, they estimated.
The FT said that just 25 per cent of the London listed shares are now in the hands of UK institutions, down from over 50 per cent, of which roughly half were active investors and the other half index tracking funds.
The group expects index trackers and some UK active investors to come out of the stock, but its greater weighting in the Toronto index should in part offset any flow-back issues.
● SOURCE Financial Times
Obituary: Baroness de Reuter
Sunday 25 January 2009
Marguerite, Baroness de Reuter, the last of the Reuters, died on Sunday aged 96. The Reuter Barony is now extinct.
She was the widow of Oliver George Paul Louis Gordon, 4th Baron de Reuter (1894-1968), whose grandfather Paul Julius Reuter established his news service in London in 1851. They married on 4 December 1937.
The Barony was granted by Duke Ernst II of Saxe-Coburg-Gotha, brother of Queen Victoria's Consort Prince Albert, in 1871. Queen Victoria formally recognised the German title as carrying the privileges of the foreign nobility in England in 1891. Reuters' founder was born in Germany in 1816 and became a naturalised British subject in 1857.
As the title passes down the male line exclusively and as all three grandsons of Paul Julius de Reuter were childless, it becomes extinct on the death of the Baroness.
"The name dies with her," said her friend Michael Nelson, former general manager.
Another close friend, John Fox, said the baroness had suffered successive strokes late last year. She died in a French old people's home on the border with Monaco.
He said Swiss-born Marguerite, a widow for more than 40 years, was intensely proud of the family link with Reuters, and of the British nationality she acquired through her husband.
The Reuter family's direct connection with the company ended on 18 April 1915 when the founder's son, Baron Herbert de Reuter, 63, shot himself three days after the sudden death of his wife. Hubert de Reuter, his only son, thus became the 3rd Baron. He served as a private in the Black Watch regiment of the British Army and was killed by machine-gun fire whilst carrying wounded men during the Battle of the Somme on 13 November 1916, five days before the end of that battle.
His cousin Oliver then became the 4th Baron.
Last year Reuters, which had already moved out of 85 Fleet Street, its headquarters since 1939, was taken over by Thomson, the Canadian media group.
Thomson Reuters’ chief executive Tom Glocer said he was saddened to hear of the baroness's death. He added:
"Although the founding family of Reuters were no longer significant shareholders in the company, the baroness did notably attend a service at St Bride's Church, London, to mark Reuters' historic move from Fleet Street to Canary Wharf in 2005."
The baroness was special guest at the Farewell to Fleet Street service.
Marguerite was born on 14 July 1912, the daughter of George Uehlinger of Neunkirch, Schaffhausen, Switzerland. Friends remembered her as a generous woman who spoke numerous languages, loved bridge, opera and ballet, and enjoyed skiing until well into her 70s.
Known to her English friends as Daisy, she long divided her time between Monte Carlo and Lausanne.
"She was a very warm-hearted, hospitable person – generous, philanthropic, a great supporter of the arts and music. She was always immaculately turned out: elegant, refined and beautiful, with the most angelic smile," Fox said.
He said Marguerite would be cremated in Lausanne and her ashes interred there with the remains of her husband.
Postscript: The funeral and cremation of Baroness de Reuter was at the Monaco Athenae on Thursday 29 January.
The service was attended by the nephew of the Baroness, Paul Dunner, and about a dozen friends, mostly from Saint Paul’s Anglican Church whose American rector Fr Walter Raymond conducted the service.
Nelson gave the address.
A wreath from the company carried a “Thomson Reuters” banner. It marked the end of an era.
● SOURCE Reuters
FT speculates Thomson Reuters may de-list in London
Friday 09 January 2009
More than 150 years after Paul Julius Reuter started to supply prices from the London Stock Exchange, traders there are beginning to ask whether Thomson Reuters might one day disappear from the UK market, the Financial Times said on Friday.
The likely reason for the symbolic shock of a possible de-listing: the valuation gap between the shares in London and in North America, currently about 22 per cent.
“North American investors are concerned the depressed UK price drags on their stock,” the FT said. “They ask whether further action, possibly including an end to the London listing, may be needed.”
Analysts at TD Newcrest, a Canadian brokerage, summarised the dilemma last week, saying: “We are reluctant to continue recommending [the Canadian stock] when we know that investors can buy an identical economic interest in the company for 22 per cent less via [the London] shares.”
Analysts attribute the discrepancy to hedge fund activity, currency exposures and differing views of the company’s assets on opposite sides of the Atlantic, but many have been startled by the extent of the gap, the FT said.
“Thomson people think the old Thomson [which encompasses legal, healthcare and scientific databases] is greatly underestimated [in London],” said Patrick Wellington, a Morgan Stanley analyst.
UK investors with memories of Reuters’ deep troubles in past market slumps have also been more bearish about prospects for its financial data business, Thomson Reuters Markets, which contributes 60 per cent of group sales and about 40 per cent of profits, the FT said.
“We’re prepared to invest the time and energy and effort with our UK investors to help them understand the dynamics of the business,” chief financial officer Robert Daleo told a conference this week. Extensive investor relations efforts have made little difference so far, however.
The FT said Woodbridge, the Thomson family investment company and the group’s largest shareholder, has attempted to tackle another factor behind the UK discount, providing liquidity to arbitrageurs who struggle to borrow the tightly held Toronto stock by swapping some of its Canadian shares for UK paper.
The strategy has been modestly lucrative. By effectively buying about C$300 million of stock at about a 20 per cent discount, Woodbridge has made about C$60 million, but the sum is small set beside the family holding company’s wealth. Two rounds of such trades have yet to close the gap.
The FT said Woodbridge, which had 70 per cent of Thomson Reuters Corp when the takeover closed, has so far amassed an eight per cent holding in Thomson Reuters Plc.
The FT said it is thought unlikely that Woodbridge would seek to increase its overall holding beyond the current total, which has edged up from 53 per cent to 55 per cent with dividend reinvestments.
A Thomson Reuters spokesman would not comment on the dual listed company (DLC) structure, it said. “People close to the company say it has no plans to change it in the next few months. However, board members review the structure regularly, aware that other DLCs, such as Reed Elsevier, have not seen such wide valuation gaps.”
The London shares represent 24 per cent of the group’s value. North Americans now control more than 50 per cent of the UK stock.
“One theory is that the group can wait until north American ownership is sufficiently high that the majority of London investors ask for Canadian or U.S. stock instead. What that percentage would have to be, however, is unclear,” the FT said.
“Ending the former Reuters’ presence on the London exchange would be a symbolic shock to many.”
● SOURCE Financial Times
The likely reason for the symbolic shock of a possible de-listing: the valuation gap between the shares in London and in North America, currently about 22 per cent.
“North American investors are concerned the depressed UK price drags on their stock,” the FT said. “They ask whether further action, possibly including an end to the London listing, may be needed.”
Analysts at TD Newcrest, a Canadian brokerage, summarised the dilemma last week, saying: “We are reluctant to continue recommending [the Canadian stock] when we know that investors can buy an identical economic interest in the company for 22 per cent less via [the London] shares.”
Analysts attribute the discrepancy to hedge fund activity, currency exposures and differing views of the company’s assets on opposite sides of the Atlantic, but many have been startled by the extent of the gap, the FT said.
“Thomson people think the old Thomson [which encompasses legal, healthcare and scientific databases] is greatly underestimated [in London],” said Patrick Wellington, a Morgan Stanley analyst.
UK investors with memories of Reuters’ deep troubles in past market slumps have also been more bearish about prospects for its financial data business, Thomson Reuters Markets, which contributes 60 per cent of group sales and about 40 per cent of profits, the FT said.
“We’re prepared to invest the time and energy and effort with our UK investors to help them understand the dynamics of the business,” chief financial officer Robert Daleo told a conference this week. Extensive investor relations efforts have made little difference so far, however.
The FT said Woodbridge, the Thomson family investment company and the group’s largest shareholder, has attempted to tackle another factor behind the UK discount, providing liquidity to arbitrageurs who struggle to borrow the tightly held Toronto stock by swapping some of its Canadian shares for UK paper.
The strategy has been modestly lucrative. By effectively buying about C$300 million of stock at about a 20 per cent discount, Woodbridge has made about C$60 million, but the sum is small set beside the family holding company’s wealth. Two rounds of such trades have yet to close the gap.
The FT said Woodbridge, which had 70 per cent of Thomson Reuters Corp when the takeover closed, has so far amassed an eight per cent holding in Thomson Reuters Plc.
The FT said it is thought unlikely that Woodbridge would seek to increase its overall holding beyond the current total, which has edged up from 53 per cent to 55 per cent with dividend reinvestments.
A Thomson Reuters spokesman would not comment on the dual listed company (DLC) structure, it said. “People close to the company say it has no plans to change it in the next few months. However, board members review the structure regularly, aware that other DLCs, such as Reed Elsevier, have not seen such wide valuation gaps.”
The London shares represent 24 per cent of the group’s value. North Americans now control more than 50 per cent of the UK stock.
“One theory is that the group can wait until north American ownership is sufficiently high that the majority of London investors ask for Canadian or U.S. stock instead. What that percentage would have to be, however, is unclear,” the FT said.
“Ending the former Reuters’ presence on the London exchange would be a symbolic shock to many.”
● SOURCE Financial Times
FT marks a Reuters milestone
Thursday 17 April 2008
On the first day of the new Thomson Reuters company the Financial Times carried the following report under the headline “Journalists shrink under Thomson”:
“Some 157 years after Paul Julius Reuter abandoned a trial with carrier pigeons and began telegraphing share prices between the London and Paris stock exchanges, Reuters’ newswire business accounts for less than 7 per cent of its revenues, writes Andrew Edgecliffe-Johnson.
“Last night, as the company’s journalists faced the prospect of becoming an even smaller part of a larger empire, they met at The Old Bell, their favoured pub when they were based on Fleet Street – once the heart of London’s newspapers and agencies.
“The gathering, described as ‘a wake’ by some insiders, came the day before a celebration at the ExCel centre in Docklands for more than 3,500 staff.
“The Thomson takeover, which will see the company’s far smaller wire business merge with Reuters media division, has triggered many staff moves and renewed questions about morale that last surfaced when the shares touched 100p in 2003.
“Some of the rumblings boil down to annoyances such as changes of e-mail address, but there is another factor, according to David Anderson, editor of IMD Reference.
“‘Anecdotally, one of the worries doing the rounds has been that because Reuters share options would vest, a lot of them [the staff] would become pretty well off and could depart,’ he said.”
● SOURCE Financial Times
