AJE/R2386/17/AS 27 July 1998
0171-282-7219
Reuters Group PLC
85 Fleet Street
London EC4P 4AJ
Dear Sirs
REUTERS GROUP PLC (THE "COMPANY")
1. We have acted as English counsel to the Company and Reuters Holdings Limited
(formerly PLC) ("RH").
2. Terms defined in the Listing Particulars (as defined in paragraph 5(a)
below), unless otherwise defined herein, bear the same meaning in this
opinion.
3. This opinion is given in connection with the Form S-8 Registration Statement
under the Securities Act of 1933 (the "REGISTRATION STATEMENT") and relating
to the registration of ordinary shares of 25p each of the Company (the
"ORDINARY SHARES"). The Ordinary Shares either:
(i) were issued by the Company pursuant to the Scheme and are transferable;
or
(ii) are issuable by the Company
as a consequence of the vesting or exercise of rights or options under the
Reuters Group PLC PLAN 2000 Employee Share Option Plan (the "PLAN").
4. For the purposes of the opinion set out in sub-paragraphs 7(a) and 7(d), we
have examined and relied on copies of such corporate records and other
documents and reviewed such matters of law as we have deemed necessary or
appropriate for the purpose of this opinion.
5. For the purposes of the opinion set out in sub-paragraphs 7(b) and (7(c), we
have examined inter alia the following:
(a) the document dated 18 December 1997 (the "LISTING PARTICULARS")
relating to a scheme of arrangement of RH pursuant to section 425 of
the Companies Act 1985 (the "ACT") (the "SCHEME") and comprising
listing particulars relating to
the Company as required by the listing rules made under section 142 of
the Financial Services Act 1986;
(b) a copy of the memorandum and articles of association of the Company as
at 18 December 1997;
(c) a copy of the Articles of Association of the Company adopted
conditionally on 16 December 1997 pursuant to the Special Resolution
(as defined in paragraph 5(j) below);
(d) copies of the minutes of meetings of the Board of Directors of the
Company held on 23 October 1997, 2 December 1997, 11 December 1997 and
12 December 1997 and the written resolution of the sole Director of the
Company dated 14 November 1997;
(e) the consents of Instinet Corporation, Telfer Investments Australia
(Pty) Limited, The Reuters Holdings PLC Qualifying Employee Share
Ownership Trust and the Founders Share Company Limited to the Scheme
referred to in the Listing Particulars;
(f) a copy of the power of attorney dated 3 December 1997 given by Simon
Yencken, as shareholder of the Company, in favour of, inter alia,
Rosemary Martin;
(g) a copy of a written resolution of all the shareholders of the Company
dated 16 December 1997 (the "WRITTEN RESOLUTION");
(h) a copy of the notice of an extraordinary general meeting together with
consents to short notice (signed by all the shareholders) of the
Company dated 16 December 1997 relating to an extraordinary general
meeting called for 16 December 1997 at which the Special Resolution was
to be proposed (the "EXTRAORDINARY GENERAL MEETING");
(i) a copy of the written consents of the holders of the ordinary shares of
25p each in the capital of the Company and of the holders of the
redeemable preference shares of (pound)1 each in the Company each dated
16 December 1997 consenting to any variation of their rights, resulting
from the passing of the special resolution referred to in paragraph
5(j) below;
(j) a special resolution of the Company increasing the share capital of the
Company, adopting new articles of association and giving the requisite
authority pursuant to the Act passed on 16 December 1997 subject to the
approval of the resolution by the shareholders of RH at the
extraordinary general meeting of RH held in January 1998 (the "SPECIAL
RESOLUTION");
(k) a copy of the minutes of the Extraordinary General Meeting of the
Company at which the Special Resolution was passed;
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(l) a copy of the Affidavit of Sir Christopher Hogg dated 20 January 1998
regarding the meeting of RH held on 19 January 1998;
(m) a copy of the Special Resolutions passed at the extraordinary general
meeting of RH held on 19 January 1998;
(n) a copy of the order of the High Court of Justice dated 16 February 1998
sanctioning the Scheme and the related reduction of capital of RH;
(o) the certificate of registration of order and minute on reduction of
capital dated 18 February 1998 confirming the reduction of capital of
RH;
(p) the results of a company search carried out against the Company and RH
at Companies House, London on 24 July 1998 and the result of an oral
enquiry at the Central Registry of Winding-up Petitions, London on 24
July 1998 (the "SEARCHES"); and
(q) a copy of the rules of the Plan adopted by shareholders resolution
passed on 21 April 1998.
Except as mentioned above, we have not examined any other corporate records,
certificates, statements or other documents and have not made any other
enquiries or investigations concerning the Company in connection with the
giving of the opinion set out in sub-paragraphs 7(b) and 7(c).
6. The opinions set out in this letter relate only to the laws of England and
Wales as in force at the date hereof and are based upon the following
assumptions:
(a) the genuineness of all signatures, the conformity to the originals of
all documents supplied to us as copies and the completeness and
authenticity of the originals of such documents;
(b) as regards the legality, validity and binding effect in England of
obligations, documents, matters or things referred to thereunder, the
same are not invalid or unenforceable under or by virtue of any
applicable laws outside England;
(c) at the time the Ordinary Shares are issued or are transferred, the
Company is validly existing under the laws of England and Wales and
that no receiver, administrative receiver, administrator or liquidator
has been appointed over the whole or any part of its undertaking or
assets and that it is not the subject of any winding-up order or
petition for winding-up;
(d) no amendments are made to the memorandum or articles of association of
the Company (which are assumed for the purpose of this opinion to be
those appearing on the microfiche records of the Company at Companies
House, London on 24 July 1998) which relate to the transfer or issue of
shares.
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(e) the New Shares (as defined in the Listing Particulars) were not issued
in the United Kingdom and elsewhere otherwise than in accordance with
the provisions of the Listing Particulars;
(f) the due authorisation, execution and delivery, in accordance with all
applicable laws, of the power of attorney referred to in paragraph 5(f)
above by Simon Yencken and that that power of attorney had not been
revoked or superseded and remained in full force and effect in the
period commencing on the execution of such power of attorney and ending
on the date of issue of the New Shares (as defined in the Listing
Particulars) pursuant to the Scheme;
(g) proper notice of the Extraordinary General Meeting had been given;
(h) that the consents to short notice referred to in paragraph 5(h) above
had been given by the requisite majority of members entitled to attend
and vote at the Extraordinary General Meeting (which appears from our
examination of the documents to be the case);
(i) that the requisite quorum was present at the Extraordinary General
Meeting either by attendance in person or by proxy (which appears from
the minutes of the Extraordinary General Meeting to be the case);
(j) that no procedural irregularity exists in relation to the Extraordinary
General Meeting;
(k) that the written consents referred to in paragraph 5(i) above were
validly given and not revoked;
(l) that the Written Resolution has been duly and validly executed by or on
behalf of all of the existing shareholders of the Company (which
appears from our examination of the Written Resolution to be the case);
(m) that the Special Resolution and the Written Resolution had not been
revoked or superseded and remained in full force and effect until the
New Shares were allotted;
(n) the copy of the memorandum and articles of association referred to in
paragraph 5(b) was true and complete until the adoption of the articles
of association referred to in paragraph 5(c) and that no amendments had
been made to such memorandum and articles of association which were not
incorporated in such copy prior to such time;
(o) the copy of the articles of association referred to in paragraph 5(c)
was true and complete up to the date of the issue of the New Shares and
that no amendments had been made to such articles of association which
were not incorporated in such copy prior to such time;
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(p) the copies of the Written Resolution, the Special Resolution and the
written consents referred to in paragraph 5(i) above are true and
complete;
(q) the resolutions of the board of directors of the Company referred to in
paragraph 5(d) above were duly passed at properly convened meetings of
duly appointed directors of the Company or, as the case may be, were
duly and validly executed by or on behalf of all the directors of the
Company (which appears from our examination of the relevant minutes and
written resolution to be the case) and have not been amended or
rescinded and are in full force and effect;
(r) the consents referred to in paragraph 5(e) were validly given and have
not been revoked and were in full force and effect at the time the New
Shares were allotted;
(s) the approval to the Special Resolution (referred to in paragraph 5(j)
above) sought as part of a special resolution of RH was validly
obtained at the extraordinary general meeting of RH held on 19 January
1998 (which appears from the minutes of such extraordinary general
meeting to be the case);
(t) the Scheme was validly approved by the requisite majority of
shareholders at the Court Meeting and the extraordinary general meeting
of RH held on 19 January 1998 (which appears from the minutes of each
such meeting to be the case);
(u) the accuracy of the Searches; and
(v) the approval of the adoption of the Plan by a resolution of the
shareholders was validly obtained at the general meeting of the Company
held on 21 April 1998.
We do not express any opinion herein as to, nor have we investigated for the
purposes of this opinion, the laws of any jurisdiction other than the laws
of England as they exist at the date hereof (including those of the European
Community (save to the extent incorporated into English law)).
This opinion is given on the basis that it will be governed by and construed
in accordance with English law and that any matters arising from this
opinion will be subject to the exclusive jurisdiction of the English courts.
7. Based upon, and subject to, the foregoing and subject to the qualifications
set out below and to any matter not disclosed to us, it is our opinion that,
so far as the laws of England, as applied by the English courts at the date
of this opinion, are concerned:
(w) the Company is a public limited company incorporated under the
Companies Acts 1985 to 1989;
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(x) the Special Resolution of the Company passed on 16 December 1997 was
validly passed as a special resolution of the Company and provides all
necessary Companies Act 1985 authorisations to the allotment of up to
1,884,432,504 ordinary shares of 25p each in the Company (including
shares to be allotted and issued pursuant to the Scheme);
(y) to the extent that the Ordinary Shares are shares allotted and issued
by the Company pursuant to the Scheme, such Ordinary Shares were
validly and legally allotted and issued fully paid and no further
contributions in respect thereof will be required to be made to the
Company by the holders thereof by reason of their being shareholders;
and
(z) to the extent that the Ordinary Shares are issuable by the Company,
subject to such Ordinary Shares being authorised share capital and
being allotted by the board of directors of the Company (or a duly
authorised committee of the board) duly authorised so to do, such
Ordinary Shares, when fully paid for and issued as a consequence of the
exercise of rights or options in accordance with the terms of the Plan,
will be validly issued and fully paid and not liable to capital calls
from the Company.
8. The opinions expressed above are subject to the following qualifications:
(a) where it can be shown that the directors of a company were not acting
bona fide or considering the best interests of that company when
entering into transactions, such transactions could be set aside. It is
a question of fact relating to the nature of the business and
operations of the Company as to whether the directors of the Company
are acting bona fide and considering the best interests of the company
and we do not express any opinion as to whether the English courts
would determine that the Company has in fact derived a benefit from the
matters which are subject of this opinion;
(b) the matters which are the subject of this opinion are subject to and
may be affected by any applicable bankruptcy, liquidation, insolvency,
reorganisation or other laws and general equitable principles relating
to or affecting the enforcement of creditors' rights generally;
(c) where any obligations of any person are to be performed in any
jurisdiction outside England, such obligations may not be enforceable
under English law to the extent that such performance thereof would be
illegal or contrary to public policy under the laws of any such
jurisdiction;
(d) as regards jurisdiction, an English court may stay proceedings if
concurrent proceedings are brought or are pending in another
jurisdiction or if action in another forum would be more convenient;
(e) the power of an English court to order specific performance of an
obligation or to order any other equitable remedy is discretionary and,
accordingly, an
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English court might make an award of damages where specific
performance of an obligation or any other equitable remedy was sought;
and
(f) the register of members is evidence, subject to any rectification, that
the registered proprietors are the legal, as distinct from beneficial,
owner of the Ordinary Shares concerned. We express absolutely no
opinion as to beneficial ownership
This opinion is given at the date set out above and we express no opinion as to
the effect that any future event or any act of the Company may have on the
matters referred to herein.
This opinion is given to you solely for your benefit for the purposes of the
filing of the Registration Statement with the United States Securities and
Exchange Commission and, except with our written consent or as set out below,
may not be relied upon by, or communicated to, any other person or used for any
other purpose nor is it to be quoted or made public in any way.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required within section 7 of the
US Securities Act of 1933 (as amended), or the rules and regulations of the
Securities and Exchange Commission thereunder.
Yours faithfully
/s/ Clifford Chance
CLIFFORD CHANCE