Early this morning, I posted the following on the IR Web Report Bits blog. I normally would not cross post items like this because IR Web Report is usually reserved for less personal and more detailed articles, but I think this calls for an exception. I’m sure there will be much more discussion about this deal in the coming weeks. But here are my initial thoughts:
I really hate this deal. It’s bad for IR. It’s bad for competition. It’s bad for European companies and investors.
Thomson Reuters is buying Hugin, an online IR and press release distributor in Europe, from NYSE Euronext. Hugin has relationships with 1,700 companies in Europe.
The release says: “Thomson Reuters proposed acquisition of Hugin is well aligned with its strategy to provide its corporate clients with effective decision making tools across the investor relations and public relations workflows. As part of the agreement, Thomson Reuters and NYSE Euronext will expand their strategic partnership toward offering value-added services to the issuer community.”
This is terrible news. Thomson Reuters will run hundreds of innovative smaller web developers in Europe out of the investor relations business, just as they have done in the US market.
They will undercut everyone with their cheap product, and NYSE Euronext’s role as an exchange holding company will make it easier for them to do so. That part just stinks. Exchanges should not be involved in businesses that help companies meet their listing standards. It’s a clear conflict of interest. Before the financial crisis, North American regulators turned a blind eye to this conflict because they lost sight of right and wrong. Hopefully, European regulators have a better ethical compass.
Other losers will be investors in companies who will have less choice among service providers. Thomson Reuters’ IR website products are horrible. They all use the same cookie-cutter template. Communication, individuality and innovation will die in Europe, just as they have in the U.S. market.
This is sad because European companies are the world leaders in online corporate investor relations communications. They produce the best online communications for investors.
I hate this deal more than any I have ever seen because it is like a cancer spreading to a good friend. One can only hope that the European regulators will find a way to block this bad deal.
And all web developers and smaller IR vendors should get together to fight it.
Good comments, as always. Reminds me of the similarly very unfortunate purchase last year by the TSX of Equicom here in Canada. A clear conflict in so many ways.
[...] Jones opublikował na IR Blog Report bardzo krytyczny post na temat planowanej akwizycji. Wskazuje w nim na wyraźny konflikt interesów pomiędzy spółką [...]
Dominic,
to change it.
These are strong words, but said in an important purpose. I fully agree with you on the conflict of interest between the stock exchange and IR services provider, such as Thomson Reuters or Hugin Group.
I dared to comment on this acquisition on our blog, referring to your post on IR Web Report:
http://blog.sensors.pl/2009/09/23/thomson-reuters-kupuje-hugin-group-i-co-z-tego/
As far as Poland is concerned, I hope the acquisition will have limited negative impact on our market, because Hugin’s services are priced very high comparing to local IR online service providers. Very few companies listed on Warsaw Stock Exchange can afford Hugin’s services. The rest, which is 450+ public companies will hopefully slowly raise their quality of IR sites thanks to a dozen of small IR interactive agencies. Still IR websites of Polish listed companies are (in large majority) way behind Western European standards, but we are working hard
Best regards and please keep on posting – I really missed your blog for a long period this spring and summer when you posted very little between April and July.
Piotr Biernacki