- Up to US$9 billion to be
returned to shareholders via substantial issuer bid/tender offer
(SIB) to commence today
- Price range for the SIB of US$42.00 to US$47.00 per share represents a (0.4)% to 11.5%
premium over the company's volume weighted average price on the
NYSE over the last 20 trading days
- Woodbridge to participate in
the SIB on a basis proportionate with its 64% ownership in Thomson
Reuters
- SIB expected to be completed on October
2, 2018 and is subject to closing of the previously
announced Financial & Risk/Blackstone transaction and is being
launched now to coordinate with that closing
TORONTO, Aug. 28, 2018 /CNW/ -- Thomson Reuters
(TSX/NYSE: TRI) today announced that its Board of Directors has
authorized the making of a substantial issuer bid/tender offer
(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The SIB will commence today and expire on October 2, 2018, unless extended or withdrawn.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 (the "F&R Transaction"). 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.
"We are committed to returning a significant portion of the
F&R Transaction proceeds to our shareholders, in line with our
original announcement when we signed the deal with Blackstone in
January," said Jim Smith, president
and chief executive officer of Thomson Reuters. "After the F&R
Transaction closes, the new Thomson Reuters plans to pursue organic
and inorganic opportunities to enhance growth and to support our
market-leading positions providing news, information and tools to
legal, regulatory and tax professionals."
Updated Use of Proceeds from F&R Transaction
Thomson Reuters plans to return an aggregate of US$10 billion of proceeds from the F&R
Transaction to its shareholders through the US$9 billion SIB and other actions, as described
below. The company now 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.
In addition to the SIB, the company also expects to return
approximately US$1 billion to
shareholders through share repurchases under its normal course
issuer bid (NCIB). The company has already repurchased
approximately US$488 million of this
amount since announcing the F&R Transaction on January 30, 2018. In addition, the company plans
to repurchase approximately US$512
million of shares after the SIB, regardless of whether the
full US$9 billion is repurchased
under the SIB.
If the number of shares tendered under the SIB is less than the
US$9 billion target, any shortfall is
expected to be addressed through additional NCIB share repurchases
and/or via a distribution to shareholders by way of a return of
capital distribution. The company expects that any return of
capital distribution would be implemented in conjunction with a
share consolidation, or "reverse stock split", which would reduce
the number of outstanding common shares on a basis that is
proportional to the return of capital distribution and would allow
the company to maintain its current dividend per share following
the transaction. The Board of Directors will review the timing of
potential future dividend increases once there is greater clarity
around the company's capital structure following the redeployment
of most of the F&R Transaction cash proceeds.
SIB/Tender Offer Alternatives
The SIB will be conducted through a "modified Dutch auction"
procedure. Shareholders who wish to participate in the SIB will be
able to do so through auction tenders, purchase price tenders or
proportionate tenders. Shareholders who validly deposit shares
without specifying the method in which they are tendering their
shares will be deemed to have made a purchase price tender.
Woodbridge/Directors/Officers
Participation
The company's principal shareholder, The Woodbridge Company
Limited and its affiliates (Woodbridge), which beneficially owns
approximately 64% of the company's issued and outstanding shares,
has agreed to make a proportionate tender, which will result in
Woodbridge tendering the number of
shares that will allow Woodbridge
to maintain its proportionate equity ownership in Thomson Reuters
following completion of the SIB. As a result, Thomson Reuters
shareholders other than Woodbridge
will set the purchase price for the SIB through auction tenders and
purchase price tenders.
Thomson Reuters' directors and officers do not plan to tender
any shares pursuant to the SIB.
Purchase Price
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 more than
US$9 billion are properly tendered
and not properly withdrawn, the company will purchase the shares on
a pro rata basis after giving effect to "odd lot" tenders (of
holders beneficially owning fewer than 100 shares), which will not
be subject to pro-ration, and proportionate tenders. In that case,
all shares tendered at or below the finally determined purchase
price will be purchased, subject to pro-ration, at the same
purchase price determined pursuant to the terms of the SIB. Shares
that are not purchased, including shares tendered pursuant to
auction tenders at prices above the purchase price, will be
returned to shareholders.
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.
Additional Information
The SIB will be for up to approximately 30.6% of the total
number of issued and outstanding shares on a non-diluted basis
(based on a purchase price equal to the minimum purchase price per
share and 699,996,846 shares issued and outstanding as of
August 24, 2018).
The SIB is optional for all shareholders, who are free to choose
whether to participate, how many shares to tender and, in the case
of auction tenders, at what price to tender within the specified
range. Any shareholders who do not deposit their shares (or whose
shares are not repurchased under the SIB) will realize a
proportionate increase in their equity interest in the company, to
the extent that shares are purchased under the SIB.
Thomson Reuters has suspended share repurchases under its NCIB,
and no NCIB purchases will be made until after the expiration of
the SIB.
The SIB is not conditional upon any minimum number of shares
being tendered but is subject to the closing of the F&R
Transaction and various other conditions that are typical for a
transaction of this type. Thomson Reuters reserves the right,
subject to applicable laws, to withdraw or amend the SIB, if
certain events occur at any time prior to the payment for tendered
shares. The SIB is expected to remain open for acceptance until
11:59 p.m. (Toronto time) on October 2, 2018, unless extended or
withdrawn.
Details of the SIB, including instructions for tendering shares,
will be included in the formal offer to purchase and issuer bid
circular, letter of transmittal, notice of guaranteed delivery and
other related documents (the SIB Offer Documents). The SIB Offer
Documents are expected to be mailed to shareholders, filed with
applicable Canadian securities regulatory authorities and made
available without charge on SEDAR at www.sedar.com, filed on
a Schedule 13E-4F with the U.S. Securities and Exchange Commission
and made available without charge on EDGAR at www.sec.gov,
and posted on the company's website at
www.thomsonreuters.com, today.
Kingsdale Advisors (Kingsdale) has been engaged by Thomson
Reuters to act as information agent for the SIB. Shareholders
who have questions regarding the SIB or require any assistance
tendering shares may contact Kingsdale by telephone
at 1-866-851-3215 (toll free in North America) or at
1-416-867-2272 (collect call outside of North America) or by email
at contactus@kingsdaleadvisors.com.
Thomson Reuters has engaged TD Securities Inc. and Merrill Lynch
Canada Inc. to act as dealer managers for the SIB in Canada and Merrill Lynch, Pierce, Fenner &
Smith Incorporated to act as its dealer manager for the SIB in
the United States. Thomson Reuters
has also engaged Computershare Trust Company of Canada to act as depositary for the SIB. Any
questions or requests for information regarding the SIB may also be
directed to one of the applicable dealer managers or the
depositary.
The offer referred to in this news release has not yet
commenced. This news release is for informational purposes only and
does not constitute an offer to buy or the solicitation of an offer
to sell shares. The solicitation and the offer to buy shares will
only be made pursuant to the SIB Offer Documents that are filed
with the Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission. The offer will not be made to,
nor will tenders be accepted from or on behalf of, holders of
common shares in any jurisdiction in which the making or acceptance
of offers to sell common shares would not be in compliance with the
laws of that jurisdiction. None of Thomson Reuters, its Board of
Directors, the dealer managers, the depositary or the information
agent makes any recommendation to shareholders as to whether to
tender or refrain from tendering any or all of their shares
pursuant to the SIB or the purchase price or prices at which
shareholders may choose to tender shares. Shareholders are strongly
urged to read the SIB Offer Documents carefully and to consult with
their financial, tax and legal advisors prior to making any
decision with respect to the SIB.
Thomson Reuters
Thomson Reuters is the world's
leading source of news and information for professional markets.
Our customers rely on us to deliver the intelligence, technology
and expertise they need to find trusted answers. The business has
operated in more than 100 countries for more than 100 years.
Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol:
TRI). For more information, visit
www.thomsonreuters.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release are forward-looking,
including Mr. Smith's remarks; the company's current
expectations regarding the timing for closing of the F&R
Transaction (which remains subject to regulatory approval and
customary closing conditions); the expected use of proceeds of the
F&R Transaction; the company's intention to commence a SIB; the
size, timing, terms and conditions for the contemplated SIB; the
company's expectation to provide returns to shareholders through
either additional NCIB share repurchases or a return of capital
distribution if it does not purchase US$9
billion of shares pursuant to the contemplated SIB; and the
company's expectations regarding its dividend per share following
any share consolidation transaction. These forward-looking
statements are based on certain assumptions and reflect our
company's current expectations. As a result, forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results or events to differ materially from
current expectations, including other factors discussed in
materials that Thomson Reuters from time to time files with, or
furnishes to, the Canadian securities regulatory authorities and
the U.S. Securities and Exchange Commission. There is no assurance
that the SIB or a transaction involving all or part of the
Financial & Risk business will be completed or that other
events described in any forward-looking statement will materialize.
Except as may be required by applicable law, Thomson Reuters
disclaims any obligation to update or revise any forward-looking
statements.
CONTACTS
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|
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MEDIA
David
Crundwell
Senior Vice
President, Corporate Affairs
+1 416 649
9904
david.crundwell@tr.com
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INVESTORS
Frank J.
Golden
Senior Vice
President, Investor Relations
+1 646 223
5288
frank.golden@tr.com
|
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SOURCE Thomson Reuters