Under the terms of the agreement, which is expected to close within eight weeks, Bridge Trading will work as a part of Instinet, an electronic agency brokerage, to provide numerous synergies. Bridge Trading will also continue to have exclusive rights to its existing Reuters Station soft-dollar clients through year end 2005.
Instinet said it views the acquisition as an opportunity to grow its client base, increase exchange-listed trading volume and expand its offerings to the institutional investor community.
This combination gives Bridge Trading clients access to a much broader trading venue which significantly enhances their access to liquidity in both listed and OTC stocks, said Phil Lynch, CEO, Reuters Americas.
Reuters acquired Bridge Trading as part of its 2001 assets purchase of Bridge Information Systems. Reuters’ offloading of the company comes after rumors of talks last year to sell its Instinet subsidiary, which were dismissed at the time. Now this latest announcement has added fuel to speculation that the information company is looking to concentrate on providing broker-neutral services by getting rid of its non-core businesses.
Investors see the deal as positive for Reuters, as its shares went up 3% to $48.67 at the end of closing, but problematic for Instinet, which saw its share price fall by 0.7% to $6.
