By Miranda McLachlan - Global financial news giant Reuters is selling its half of archival news and business information outfit Factiva to joint venture partner and rival Dow Jones for $160 million.
The news came as Reuters revealed that total rvenue in the third-quarter was up 3.3 per cent to £631 million, and that revenue for the full year was likely to come in at the top of company guidance, driven by price increases and volume growth.
As part of the deal to shed its Factiva stake, Reuters will pay Dow Jones $153 million in cash plus $7 million in preferred shares issued by Factiva.
It has undertaken not to compete with Factiva's core business for two years and to continue with arrangements to supply Reuters content and other commercial arrangements.
In return, Reuters will receive half of all cash still on Factiva's balance sheet after settlement of any outstanding inter-company items and adjustments to Factiva's working capital before the business becomes a subsidiary of Dow Jones.
Reuters chief executive Tom Glocer described the transaction as "the natural conclusion to this successful joint venture". The deal is expected to be neutral for Reuters in terms of 2007 and 2008 adjusted earnings, which exclude items such as profits on disposals.
Mr Glocer said the third quarter performance was pleasing, highlighting the fact it was the group's "strongest quarter of net sales so far this year".
"Our underlying revenue growth of 5.3 percent demonstrates that Reuters' core business is responding well to generally favourable market conditions, and we are seeing good growth from our [recent] initiatives," he said.
Geographically, strongest revenue has come from its US and Asian operations while this year's price increases, volume growth driven by bouyant market conditions and revenue from exchange fees and specialist data were major contributors.
At the news provider's interim resuilts in July, the company provided full-year revenue guidance of 5 to 6 per cent growth on a constant currency basis. Reuters has now updated that forecast, saying revenue will be at the top of that range given the continued momentum in the third quarter.
Turning to the current fourth quarter, the company is expecting subscriptions and transaction revenue to continue to fuel revenue growth. However, revenue from software sales is not likely to be as pronounced as the previous fourth quarter given that these sales are now more evenly spread across the year.
The negative effects of a weaker US dollar is likely to have more of an impact this quarter as will the impact of the integration of its US content business Moneyline Telerate.
Reuters also unveiled the appointment of Nandan Nilekani, chief executive of IT provider Infosys to its board as a non-executive director.
Source: Times Online
A Saudi aggression fighter jet targeted a citizen's car driving in Fara area of Kutaf district in Saada province overnight, killing the driver and injuring his friend, a security official said on Monday.
Scores of Saudi enemy soldiers were killed and injured on Sunday when the army and popular forces repelled a Saudi military attempt to sneak into Shurfah site in the border province of Najran, a military official said.
The operation was accomplished successfully against the Saudi
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