(October 20 – 10:55 ET) – Reuters is contemplating a sale of a minority stake in Instinet, its popular after-hours trading system
The firm has decided to sell shares in Instinet. It has begun work on an initial public offering in the U.S. Instinet is valued at about US$4.3 billion, analysts are anticipating a sale of as much as 25% of the firm.
The deal will not only bolster the firm’s operating cash, but it will arm it with stock to make acquisitions when the alternative trading systems begin consolidating.
The move suggests that Instinet is anticipating some consolidation.”An IPO will support Instinet’s geographic, customer and product expansion and provide an acquisition currency if required,” says Reuters.
The annoucement came shortly after Reuters announced its earnings this morning. Revenue for Instinet grew by 46% to US$276 million in the year, reflecting strong equity volumes, especially in the U.S. which accounted for over 75% of Instinet’s revenue in the quarter.
“Instinet continued to spend heavily on expanding its structure and capabilities and on diversification of its product line. It plans to launch its retail product this quarter.”
-IE Staff