Reuters fails to get the best Instinet price

NEWS group Reuters is close to offloading its electronic broking arm Instinet for less than shareholders had hoped. The final disposal in chief executive Tom Glocer's big sell-off is expected to raise £590m, instead of the £670m analysts had pencilled in.

US-listed Instinet, in which Reuters has a 62% stake, is being bought by US stock market Nasdaq.

It wants to get its hands on Instinet's electronic exchange, Inet, to better compete with the New York Stock Exchange.

The company's broker arm is due to be sold on to private equity firm Silver Lake Partners. In total, Nasdaq will pay £950m, valuing Instinet at 18% less than its shares were worth at Friday's close. The stock has raced higher since Glocer hinted at a sale last autumn.

Lorna Tilbian at Numis Securities said the mooted sale price was 'disappointing'. Reuters closed off 6¾p to 406¾p. The proceeds, worth 40p a share, could prompt a share buyback.

Glocer is tidying up Reuters' operations as he goes hunting for revenue growth. He raised £91m last month with the sale of lossmaking business telecoms arm Radianz to BT. Its stake in software firm Tibco turned a £206m profit.

After three years of decline, prompted by huge investment banking job losses, orders for Reuters' financial news terminals are finally outpacing cancellations. But revenues have yet to pick up. In response, Glocer has slashed jobs to squeeze out £340m of costs. A fifth of staff will be based in low-cost centres in India and Thailand within a year.

His next scheme is to sell video news clips direct to consumers over the internet and mobile phones.