#Canada #Toronto #Thomson Reuters #Capital Return #opt-out

Thomson Reuters Reminds Non-Canadian Shareholders

Thomson Reuters, a significant player in the global information services industry, has announced an important reminder for its shareholders who are taxable in jurisdictions outside of Canada. The company is offering these shareholders an opportunity to "opt out" of its proposed return of capital, an option that could potentially be more beneficial than participation for certain shareholders.

Overview of the Return of Capital

As outlined in the management proxy circular dated March 13, 2026, Thomson Reuters plans to execute a return of capital through a special cash distribution of approximately $605 million, equivalent to around $1.36 per common share. This initiative comes alongside a consolidation of the company’s outstanding common shares, often referred to as a reverse stock split. These financial moves are designed to distribute cash to shareholders in a manner generally regarded as tax-free for those subject to Canadian taxes.

In essence, the return of capital allows shareholders to receive cash without immediate tax implications in Canada. However, eligible shareholders residing outside of Canada are given the chance to opt out of this transaction, which may better align with their tax circumstances.

The Opt-Out Process

For those eligible, opting out involves forgoing the cash distribution. However, shareholders who choose this route will still engage in the share consolidation aspect of the transaction. This means they will retain the same number of shares while gaining a proportional increase in their equity and voting interests within the company. The opting-out process can differ depending on whether shares are held through a bank, broker, or directly.

Process for Non-Registered Holders: If shares are held indirectly via an intermediary, the shareholders must consult their bank or broker for specific instructions regarding the opt-out procedure. Registered shareholders, on the other hand, will receive clear directives from Computershare Trust Company of Canada. They must submit their opt-out election and certification by the deadline of 5:00 PM EDT on April 27, 2026.

Key Deadlines and Tax Implications

It's crucial for shareholders to adhere to various deadlines set by their respective intermediaries. If a shareholder does not choose to opt out or is ineligible, no action is necessary to engage in the capital return.

The implications of both the return of capital and share consolidation transactions are multifaceted, particularly from a tax perspective. Shareholders are strongly advised to scrutinize the circular and related documents and to seek guidance from financial advisors regarding their individual circumstances.

Understanding Conversion and Consolidation Ratios

The structure of these transactions includes specific ratios governing conversions and consolidations. Under the established plan, non-participating shares will convert into new common shares, subsequently adjusted based on the ratio defined by market conditions leading up to the execution date. This will lead to a more clarified understanding of shareholding post-consolidation.

Conversion Ratio Calculation: The formula for this ratio can be represented as:
1 / [1 - (Cash Distribution Per Share / $X)], where $X is the average trading price of Thomson Reuters shares.

Share Consolidation Ratio Calculation: This ratio is found by the equation:
($X - Cash Distribution Per Share) / $X, applying the same definition for $X as above.

These ratios are designated to maintain proportionate equity participation among shareholders based on their engagement in or exclusion from the cash distribution.

Additional Assistance For Shareholders

To qualify as an "Eligible Opt-Out Shareholder," one must not be a resident of Canada for tax purposes and must be liable for taxation in another jurisdiction, alongside fulfilling other specified criteria. Additional information can be sourced from Thomson Reuters’ investor relations page, where all necessary documentation is available.

For ongoing questions, both registered and non-registered shareholders can seek help from Computershare Investor Services or reach out to D.F. King & Co., Inc., the designated Information Agent, at provided contact numbers. This initiative marks Thomson Reuters' commitment to ensuring its shareholders are well-informed and equipped to make the best financial decisions regarding their investments.

About Thomson Reuters

Thomson Reuters stands at the forefront of providing essential insights, software, and resources that assist professionals in making informed decisions. Operating within various sectors such as legal, tax, and media, the company remains dedicated to delivering trusted information and navigating complexities in decision-making environments.