Reuters Group Plc, the London UK-based global news agency and financial information group, is preparing plans to float off its Palo Alto, California-based Tibco Software subsidiary. Under a reorganization agreed last year, option plans were established under which up to 26% of the outstanding shares of Tibco Software could be acquired by employees. This makes an IPO inevitable though all a Reuters official would confirm was that no final decision has been made. Reuters bought Tibco – then known as Teknekron Software Systems – for $124m in 1994 and stands to make a hefty profit on the deal, given the kind of premium that the market places on any companies that claim they can capitalize on the growth of the internet. There are two minority shareholders – Cisco Systems Inc with an 8% holding and Mayfield Venture Capital Fund that owns 5%. Reuters is likely to retain a substantial holding in Tibco which it has always seen as crucial to future plans to deliver information over the internet. At the start of this year, Reuters acquired push technology start-up inCommon Inc so it could add its push technology to Tibco’s multicasting broadcast technology (CI No 3,331). But Reuter’s recent mediocre financial performance seems to have rubbed off on Tibco. When Reuters revealed mid-term results earlier this week Tibco’s revenue only limped ahead by 3% to the equivalent of $41.2m. But Reuters was hopeful that continued investment in new product development, additional expenditure on customer support and the timing of contract completions should benefit the second half of the year.
