Reuters jumps 25% as Canada's Thomson is tipped to table a bid
The stock closed at 615.75p, having touched a five-year high of 649.75p, valuing the news agency at 7.8 billion, as speculation grew that it was on the verge of receiving a bid from Canadian rival Thomson Corporation.
Some traders had earlier cited Rupert Murdoch's News Corp as a possible suitor, after its $5bn (2.5bn) offer for Dow Jones - owner of the Wall Street Journal newspaper - was turned down by Dow Jones's controlling Bancroft family.
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Hide AdReuters - founded in 1851 - confirmed to the stock exchange that it had received a preliminary approach from an un-named third party that "may or may not" lead to a full offer.
A spokesman for Thomson said: "I will not comment on rumours and speculation."
Any takeover offer could face considerable obstacles.
Under Reuters's unique ownership structure, a single golden share held by the Reuters Founder Share Company can block a hostile bid. The company is run by 15 trustees, charged with ensuring the "independence, impartiality, integrity and freedom from bias" of the global news organisation.
A friendly approach, however, would be possible.
Sam Hart, an analyst at Charles Stanley, said: "The restrictions of the constitution ... are by no means insurmountable and an agreed bid is possible."
In a note, analysts at Numis Securities said: "We believe the most likely bidder is Thomson, which is already a player in the financial space and, with the sale of its College Education business for $5bn well advanced, has the firepower to fund a deal." They said any bid was likely to be in the range 610p-660p a share.
Media shares on both sides of the Atlantic have surged since News Corp unveiled its $60-a-share-bid for Dow Jones on Tuesday. Dow Jones also competes with Reuters, Thomson and privately owned Bloomberg in providing breaking financial news.
Reuters was founded by German-born immigrant Paul Julius Reuter, who opened an office in the City of London that transmitted stock market quotes between the UK and Paris via the new Calais-Dover cable.
The business grew into the world's biggest news agency, but now derives the vast majority of its revenues from its financial services operation.