Telerate in talks to buy Extel from United Newspapers

TELERATE, the US financial information group backed by the Associated Press/Dow Jones group, is in talks to buy Extel, the news provider put up for sale by United Newspapers last week.

Senior executives at Telerate are said to be ecstatic at the prospect of picking up Extel for United's asking price of between pounds 50m and pounds 60m, as Telerate has just made the strategic decision to set up a European financial news service and is starting to recruit staff.

'The timing could not have been better,' said a source close to Telerate. 'They are putting up for sale the sort of business we are trying to develop.'

Advertisements appeared in the Guardian and the UK Press Gazette last week for senior financial journalists to start a news wire sevice. Though the advert did not say Telerate was behind it, discreet inquiries at the group were met with the comment: 'You've rumbled us. We knew we couldn't keep the secret for long.'

Telerate, which has a strong reputation for providing information on fixed-interest securities, particularly US Treasury bonds, is hoping to capitalise on the problems of the Stock Exchange's news service, Topic, which is being sold to the Swiss group Telekurs. It will launch an invigorated 'Topic Plus' service in the new year.

Meanwhile, Reuters is trying to snatch the market with its Equity Focus service. Many securities firms in the City, however, are nervous of Reuters because of its reputation for dramatically increasing the charge for a service once it is established.

Extel, which United bought for pounds 250m six years ago, has found it hard to keep up with the competition, despite hiring its managing editor Gavin Shreeve from the Financial Times business information service.

But the group has developed a successful news service in the derivatives market.