Thomson Reuters (Symbol-TRI)

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Taggart
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Re: Thomson Reuters (Symbol-TRI)

Post by Taggart »

ig17 wrote:
Taggart wrote: Still on my watch list and a possibility for a purchase in consumer discretion ...
I would never think of them as consumer discretionary stock. They sell to businesses, not consumers. Take a look at their 2012 revenue breakdown on page 17.

http://phx.corporate-ir.net/External.Fi ... lwZT0z&t=1
In my own personal spreadsheet I just put the various Canadian equities within whatever sectors Standard & Poor's deems them to be. Makes it easier for me.
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Re: Thomson Reuters (Symbol-TRI)

Post by Peculiar_Investor »

Clearly this stock isn't followed much on FWF based on the lack of recent updates. Interesting to read back our historical discussions.

I'm posted here because this news seems to be a well received move, Exclusive: Blackstone in talks to buy majority stake in key Thomson Reuters unit. Yahoo! Finance is indicating the NYSE listed shares are up 10.5% currently in the pre-market.

As a long-time shareholder this might price pop might push valuations to the point where I'd consider selling.
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Hmmmmm! I just bought this thing at circa $54 on the assumption it was about to break out with bolder moves after being in the doldrums. This was not in the pot of things I was anticipating and will have to re-examine what to do about this once I get home in a few weeks.
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Re: Thomson Reuters (Symbol-TRI)

Post by Peculiar_Investor »

The deal is done, Blackstone to Buy Thomson Reuters Unit in $20 Billion Deal - Bloomberg
Thomson Reuters said it will receive about $17 billion in proceeds, consisting of $3 billion from the Blackstone-led group and $14 billion in debt and preferred equity. The company will use the money to repay debt, establish a new standalone company, pursue organic growth and M&A and repurchase stock, according to the statement.
The press release from Thomson Reuters -- Thomson Reuters and Blackstone Announce Strategic Partnership for Thomson Reuters Financial & Risk Business | Thomson Reuters
After closing of the transaction, Thomson Reuters will focus its efforts on expanding its market segment positions and accelerating growth in its Legal, Tax & Accounting and Regulatory businesses. Thomson Reuters will be well capitalized with significant capacity for organic and inorganic growth, with expected pro forma net debt-to-EBITDA of approximately 2.1 times (excluding the $1 - $3 billion of proceeds retained for reinvestment). Thomson Reuters is also expected to benefit from its 45% retained interest in F&R over time.
Thomson Reuters has their Q4 earnings announcement and call upcoming on February 8th. I would expect a few more details to be revealed at that time.

This shareholder will likely sit and wait until after the Q4 earnings announcement to make a decision on next steps, unless of course Mr. Market offers more of a premium than was offered today.
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Re: Thomson Reuters (Symbol-TRI)

Post by Norbert Schlenker »

will use the money to repay debt, establish a new standalone company, pursue organic growth and M&A and repurchase stock
Strangely, "pay the shareholders" isn't on their list.
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Re: Thomson Reuters (Symbol-TRI)

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Maybe they will save that announcement for Feb 8th. I really like the debt/EBITDA ratio of circa 2.1. Puts ENB's comparable ratio over 6 to shame.
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Re: Thomson Reuters (Symbol-TRI)

Post by Norbert Schlenker »

Selling financial data is a much less stable business than transporting methane. There's no reason that leverage ratios should be comparable between these two.
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Agree they are not comparable businesses but ENB appears to be living more dangerously all the time with its highly leveraged balance sheet (there is a limit to tolls shippers will pay). TRI is looking very good if they can now execute new opportunities in a highly accretive way.
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Re: Thomson Reuters (Symbol-TRI)

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Well, the premium from that deal sure did not last long! :roll:
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Re: Thomson Reuters (Symbol-TRI)

Post by Peculiar_Investor »

Norbert Schlenker wrote: 30 Jan 2018 19:22
will use the money to repay debt, establish a new standalone company, pursue organic growth and M&A and repurchase stock
Strangely, "pay the shareholders" isn't on their list.
Nowadays "repurchase stock" is deemed paying the shareholders. The question of whether dividends (paying the shareholders) vs buybacks remains largely unanswered, with differing opinions as to which is better for the shareholder. I thought we had a dedicated FWF topic on the matter, but so far I haven't found it with a forum search. The closest so far is Share Buybacks.

Google turned up Dividend Versus Buyback: Which Is Better? | Investopedia which offers a pretty decent summary of each side of the argument and the fact there generally is no clear winner.
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AltaRed
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Share buyback by modified Dutch auction, USD$42-47 offer, begins today.
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Re: Thomson Reuters (Symbol-TRI)

Post by Peculiar_Investor »

More details on the buyback ... Thomson Reuters announces substantial issuer bid/tender offer for up to US$9 billion of its common shares | Thomson Reuters. Looks like they want to buy back about just under 31% of the shares outstanding.
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

The market is guessing $45 this morning. I think that if TRI trades over $46.25 or thereabouts before Oct 2nd, I will sell on the open market. Otherwise, I will just hold (not participate in the auction).
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Re: Thomson Reuters (Symbol-TRI)

Post by Taggart »

You know back in the 90's when I used to go through Value Line at the reference library and look at Reuters, I would say Wow. When Thomson took it over, I thought it would turbocharge the stock. Nothing of the kind, not even close. I got so tired of seeing the lacklustre dividend increases from Thomson that I finally gave it up. Perhaps today, I would have been a bit more patient with the company, but I get that way as I get older.....more willing to just sit on them.
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Re: Thomson Reuters (Symbol-TRI)

Post by Norbert Schlenker »

AltaRed wrote: 29 Aug 2018 14:08 The market is guessing $45 this morning. I think that if TRI trades over $46.25 or thereabouts before Oct 2nd, I will sell on the open market. Otherwise, I will just hold (not participate in the auction).
There's an additional issue for individual taxable Canadian holders. If you tender to the auction, you're going to get about C$58 if today's market price is anything to go by. Page 51 of the offering memorandum says that will be about $13 for the shares and $45 as a taxable dividend subject to gross-up.

It's worth doing an approximate tax calculation to see whether the combination of a big dividend (grossed up, it's about $62/share) and a (very likely) capital loss are to your benefit.
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Re: Thomson Reuters (Symbol-TRI)

Post by DavidR »

Norbert Schlenker wrote: 13 Sep 2018 14:45 There's an additional issue for individual taxable Canadian holders. If you tender to the auction, you're going to get about C$58 if today's market price is anything to go by. Page 51 of the offering memorandum says that will be about $13 for the shares and $45 as a taxable dividend subject to gross-up.

It's worth doing an approximate tax calculation to see whether the combination of a big dividend (grossed up, it's about $62/share) and a (very likely) capital loss are to your benefit.
Yikes! Thanks for raising this issue Norbert. Wonder how many of my clients next tax season will be querying "Why did broker report a large dividend on my T5?" Also, for those that do their own Capital gain/loss calculations, we'll have to remember to count only the $13 as proceeds of disposition.
** And for those that rely on their brokers' calculation of Gains/Losses - don't forget to double-check that they haven't screwed it up. Anybuddy using IB as their broker ?
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Agree it is obviously good to know that wrinkle. That, of course, is only if one wishes to participate in the offering. I don't find it attractive, no matter which of the 3 options one picks. The price just won't be good enough and I have doubts TRI will get the uptake they are looking for. That said, I've been very wrong in my guesses before :?
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

The Corporate Action Notice is out, at least with BMO IL
BMO InvestorLine has been informed of an Offer to Purchase for Thomson Reuters Corporation.

Please refer to the links below for the associated event terms and important notes

Thomson Reuters Corporation Event Terms and Important Notes Canadian Funds (1-3)
Thomson Reuters Corporation Event Terms and Important Notes Canadian Funds (1-20)
Thomson Reuters Corporation Event Terms and Important Notes USD Funds (1-3)
Thomson Reuters Corporation Event Terms and Important Notes USD Funds (1-20)

BMO InvestorLine requests that you direct inquiries pertaining to the offer (other than submission of instructions) to Thomson Reuters Corporation. Shareholders are advised to obtain independent advice and consult the offering circular regarding any possible tax consequences and for further details of the offer.

Please call BMO InvestorLine on 1-888-776-6886 and provide your instructions. Faxes and/or written instructions will not be accepted. Instructions must be received prior to October 1, 2018 9:00am Eastern Standard Time (EST). Any instructions received after this time will be sent on a best effort basis only. If no instructions are received, BMO InvestorLine will take no action.

BMO InvestorLine does not charge your account any commission for reorganizations or entitlements. Please allow 1-3 weeks after the expiry date for processing of Canadian issues and up to 90 days if US based. If you tender your shares to an offer, please ensure you do not place any sell orders on the position. This may result in a short position and financial losses that you may be responsible for. If you wish to place a sell order, please contact us first to ensure your original instructions can be cancelled.

For offers that include a cash payment, the payment will be deposited in the account in the same currency as the currency in which the position is held in the account, which may result in exposure to a foreign currency conversion. BMO Investorline will not be responsible for any losses incurred as a result of a foreign exchange conversion.

Regards,
BMO InvestorLine
As of now, I won't be taking any action.
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Re: Thomson Reuters (Symbol-TRI)

Post by jay »

thanks for the heads up on this guys.
This (i.e. the whole dividend thing) does not apply to someone who is selling now obviously, right?
I just sold my entire holding yesterday at 59.37 (from 53.82)
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Re: Thomson Reuters (Symbol-TRI)

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This is only about participating in the modified Dutch auction or not with existing shares, not open market sales.
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Re: Thomson Reuters (Symbol-TRI)

Post by jay »

AltaRed wrote: 18 Sep 2018 11:04 This is only about participating in the modified Dutch auction or not with existing shares, not open market sales.
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Probably due (partially) to the wrinkle pointed out by Norbert, the tender offering was not that well received, resulting in TRI purchasing at the high limit of their offer. I didn't think the offer price was that great anyway given recent stock price history. The market seems to like the outcome this morning though.
TORONTO, Oct. 3, 2018 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today announced the preliminary results of its substantial issuer bid/tender offer (SIB) to purchase from shareholders for cancellation up to US$9 billion of its outstanding common shares. The SIB expired at 11:59 p.m. (Toronto time) on October 2, 2018. Based on preliminary results, approximately US$6.5 billion of shares were tendered under the SIB (including shares tendered by notice of guaranteed delivery).

In accordance with the terms and conditions of the SIB and based on a preliminary count by Computershare Trust Company of Canada, as depositary for the SIB, Thomson Reuters expects to take up and purchase for cancellation approximately 138.7 million shares at a purchase price of US$47.00 per share. The shares expected to be purchased under the SIB represent approximately 19.8% of the shares issued and outstanding on a non-diluted basis at the time that the SIB was announced. After giving effect to the SIB, approximately 562 million shares are expected to be issued and outstanding.

The number of shares to be purchased under the SIB and the purchase price are preliminary, subject to verification by the depositary and assume that all shares tendered through notice of guaranteed delivery will be delivered within the two trading day settlement period . Thomson Reuters will announce the final results following completion of take-up of the shares.

The company's principal shareholder, The Woodbridge Company Limited and its affiliates (Woodbridge) made a proportionate tender, which maintains its proportionate equity ownership in Thomson Reuters of approximately 64% following completion of the SIB.

As the number of shares tendered under the SIB was less than the US$9 billion target, Thomson Reuters plans to provide additional information regarding completing returns to shareholders in connection with announcing final results of the SIB on October 8, 2018.

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.
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Re: Thomson Reuters (Symbol-TRI)

Post by Norbert Schlenker »

AltaRed wrote: 03 Oct 2018 12:19 Thomson Reuters (TSX/NYSE: TRI) today announced the preliminary results of its substantial issuer bid/tender offer (SIB) to purchase from shareholders for cancellation up to US$9 billion of its outstanding common shares. The SIB expired at 11:59 p.m. (Toronto time) on October 2, 2018. Based on preliminary results, approximately US$6.5 billion of shares were tendered under the SIB (including shares tendered by notice of guaranteed delivery)....

As the number of shares tendered under the SIB was less than the US$9 billion target, Thomson Reuters plans to provide additional information regarding completing returns to shareholders in connection with announcing final results of the SIB on October 8, 2018.
And here's the follow up of what they're going to do with the $2.5B left over:
TORONTO, Oct. 23, 2018 /PRNewswire/ -- Thomson Reuters (TSX/NYSE: TRI) today announced that it has commenced the mailing of a management proxy circular and related documents to its shareholders in connection with an upcoming special meeting at which shareholders will be asked to approve a proposed return of capital transaction. Thomson Reuters is aware of rotating strikes by Canada Post workers which may result in delays for shareholders with Canadian addresses. The management proxy circular and related documents are available online and for pick-up, as set out below.

The return of capital transaction consists of a cash distribution of US$4.45 in cash per common share, or approximately US$2.5 billion in the aggregate, to holders of common shares and a consolidation of outstanding common shares (or "reverse stock split") on a basis that is proportional to the cash distribution. The share consolidation ratio will be based on the volume weighed average trading price of the common shares on the New York Stock Exchange for the five trading days immediately prior to the return of capital becoming effective.

The proposed return of capital transaction is intended to distribute cash on a basis that is generally expected to be tax-free for Canadian tax purposes. Certain shareholders who are taxable in a jurisdiction outside of Canada (including taxable U.S. resident shareholders and others) ("Eligible Opt-Out Shareholders") will be able to opt out of the transaction.
Default in Canada is that a shareholder collects US$4.45/share, which will reduce ACB, and then the shares will be reverse split at around 9-for-10. If you hold round lots now, you won't afterward.
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Re: Thomson Reuters (Symbol-TRI)

Post by Peculiar_Investor »

Thanks for keeping us in loop.

Given the size the distribution and the fact that it will be USD, I guess I'm going to need to journal the shares to the USD sub-account(s) to avoid my brokers forex fees.
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Re: Thomson Reuters (Symbol-TRI)

Post by AltaRed »

Norbert Schlenker wrote: 03 Nov 2018 15:32 Default in Canada is that a shareholder collects US$4.45/share, which will reduce ACB, and then the shares will be reverse split at around 9-for-10. If you hold round lots now, you won't afterward.
Came to about the same conclusion. Irritating as hell.
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