Instinet To Acquire Island ECN
Reuters subsidiary Instinet has entered into a definitive agreement to acquire Island ECN, in an all-stock transaction with the aim of creating a global electronic trading platform serving professional traders and institutional investors worldwide. The agreement contemplates that a special dividend of US$1.00 per share will be paid by Instinet to all of its shareholders at a date prior to the closing. Reuters, which currently holds 83% of Instinet’s shares, will receive US$207 million of the planned dividend. On completion of the acquisition, Reuters will hold approximately 62% of Instinet’s enlarged share capital on a fully-diluted basis. Island’s stockholders will own approximately 25% of Instinet’s common stock on a fully-diluted basis, representing a total estimated transaction value of US$508 million, after taking into account the special dividend and based on the US$7.05 closing price of Instinet stock on 7 June 2002.