Dow Jones Telerate And Cantor Fitz Eyeing Bridge

Two more potential buyers of Bridge Information Systems Inc. have emerged from the woodwork: Dow Jones Telerate and Cantor Fitzgerald L.P. The news about Telerate and Cantor's interest in purchasing Bridge follows earlier speculation about the vendor's being eyed up by the likes of ADP and Reuters (IMD, Nov. 21). While ADP and Reuters appear to still be in the hunt for Bridge, at least one prominent player appears to have dropped out of the chase to acquire Bridge's shares: Thomson Corp.

According to a source close to Thomson, Thomson's ILX Systems Inc. subsidiary took a look at Bridge and decided to pass. This source -- who asserts that Bridge is asking between $100 and $125 million for all shares of the company -- says that ILX was concerned with what it perceived as the "high price" Bridge charges its customers for its products.

Meanwhile, a source close to Bridge confirms that both Telerate and Cantor -- the interdealer-broker whose exclusive prices have made Telerate a must-keep service -- have recently shown interest in acquiring the vendor. This source declines to elaborate on either Telerate or Cantor, but says that Bridge is seeking in excess of $125 million for the company.

If Telerate eventually decided to purchase Bridge, it would not be the first attempt the vendor has made to get a chunk of the North American equities marketplace. Earlier this year, Telerate embarked upon a collaborative system integration project with ILX (IMD, May 9) -- a project that was designed to offer Telerate's fixed-income data and analytics with ILX's equities-oriented services via a unified platform. Now, with speculation about Telerate's participation in the Bridge bidding continuing to grow, the vendor appears ready to mount a charge to make more noise in the equities marketplace.

A Telerate spokesperson declines to comment, while Telerate officials did not return calls seeking comment. Cantor officials did not return calls seeking comment.

Bridge's investment banker, the Baltimore-based Alex. Brown Inc., is handling the search for potential investors in Bridge. In a previous edition of IMD (IMD, Sept. 26), an Alex. Brown official said that the investment banker was exploring the market for "strategic alternatives" that will help the vendor raise capital and create "liquidity" for shareholders. But that same official did not return a call seeking comment on which companies have checked out Bridge to date.

According to a source close to ADP, though the market data vendor is still looking into acquiring Bridge, it will not make any moves at the current asking price. This source asserts that although ADP has around $500 million in cash to spend, it is prepared to wait out Bridge for the lowest possible price. "ADP buys things cheap. They don't pay a premium price for anything," the source says.

In addition, citing anti-trust laws, this source says that ADP might be prevented from snatching up Bridge because of its dominant position in the retail brokerage marketplace. ADP, which has over 85,000 terminals, has made two market data acquisitions in the past year: Over two months ago, ADP purchased the assets of retail quote vendor Stockmate Financial Systems Inc. (IMD, Sept. 12); and in January of this year, ADP bought the assets of Montgomery Securities Inc.'s TriStar Market Data Inc. (IMD, Jan. 17). Both deals strengthened ADP's already dominant position in the marketplace. However -- should ADP decide to make a run at Bridge -- it is unlikely that anyone would declare the vendor in violation of anti-trust laws with the presence of a competitor with the size and might of Reuters in the same market.

Speaking of Reuters, the source close to Bridge says that the vendor may still take a shot at buying Bridge because Bridge would complement Reuters' Instinet Corp. unit.