Blackstone Bets on Further Refinitiv Gains After Doubling Value
(Bloomberg) -- Blackstone Group Inc. is poised to double the value of its investment in Refinitiv in just 10 months, but the buyout giant won’t be selling out anytime soon.
Under proposed terms of a sale of the data-and-trading platforms firm to the London Stock Exchange Group Plc for $27 billion, the owners would have to stay at least partially invested in the combined company for about five years, according to people familiar with the matter. Such so-called lockups keep existing investors committed to the business and sharing the deal risk while allowing them to benefit from potential growth.
Refinitiv’s current owners, a consortium of investors led by Blackstone as well as Thomson Reuters Corp., wouldn’t be able to sell any stock until two years after the deal closes, the people said, asking not to be identified because the terms are private. That could take at least a year. After that, the owners would be allowed to sell a set number of shares in phases over the next couple of years, delaying a full exit for about five years, they said.
Representatives for Blackstone, Thomson Reuters and the LSE declined to comment.
Refinitiv offers products including the Eikon terminals, the FXall platform and trading execution system Redi. Bloomberg LP, the parent of Bloomberg News, competes with Refinitiv to provide financial news, data and information.
On paper, the deal is already looking like a big return for the group that bought a majority stake in Refinitiv last year. The sale to Blackstone, Canada Pension Plan Investment Board and GIC, Singapore’s sovereign wealth fund, valued the business at $20 billion.
Of that, about $6.5 billion was equity with the rest debt. The debt, which was about $13.5 billion at the time, has remained at similar levels meaning the equity value of Refinitiv has more than doubled since the deal closed in October, people familiar with the matter said.
That’s on top of the money made from the initial public offering of Refinitiv’s bond-trading platform Tradeweb Markets Inc.
And the returns for those investors could increase if the new company grows. On the first day of trading since the plans were announced, the LSE saw its shares soar as much as 16% higher to a record as investors bet the planned takeover will transform the bourse into a global force in data and trading platforms.
Refinitiv holders may receive a stake of about 37% in the combined group, LSE said Saturday. Blackstone is likely to get two board seats and Thomson Reuters another, one of the people said. Martin Brand, a senior Blackstone dealmaker who lead the transaction for the buyout firm, is likely to be named as a board member, one of the people said.
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