Reuters to Reduce TIBCO Position, Adds More Cash
Reuters Group PLC has announced that it will reduce its TIBCO Software, Inc. holdings (103,304,269 shares, or 49 percent, as of September 30, 2003). In addition, TIBCO will be allowed to market and sell its applications to the financial services market, something it was precluded from doing under the terms of a license agreement with Reuters. However, TIBCO will not be able to market or sell risk management applications and market data systems to financial services companies. Reuters will continue to use TIBCO technology internally, but will phase out as a general reseller of TIBCO products. Reuters will continue to make quarterly payments of up to US$5 million to TIBCO until its reseller rights are phased out in March 2005. The planned sale of TIBCO shares by Reuters puts an end to months of speculation and is consistent with the vendor�s goal of rationalizing its businesses back to content. The planned sale will add cash (as will the proceeds from the proposed sale of Reuters' Fleet Street headquarters in London) at a time when the dividend is not being covered by internal cash flow. TIBCO has agreed to file a registration statement with the SEC to facilitate public sales of the stock by Reuters. If Reuters completes a single registered public sale of at least US$100 million of TIBCO shares within 12 months of the SEC filing, TIBCO will repurchase an equal number of shares from Reuters at the same price, up to a maximum of US$115 million.