Instinet to Buy Rival Island for $500 Mln - WSJ Mon Jun 10, 2:04 AM ET LONDON (Reuters) - U.S. electronic share trader Instinet Group Inc is close to buying rival Island ECN for $500 million in stock to strengthen its hand against increasing competition, the Wall Street Journal said on Monday. A marriage of Instinet, majority owned by Reuters Group Plc, and unlisted Island, its nearest rival, would create the largest alternative electronic trading network with more than a fifth of Nasdaq trading volumes -- second only to Nasdaq's own electronic trading platform. Instinet and Reuters both declined to comment. Island was not immediately available for comment. The journal, quoting unnamed sources, said Instinet, which had about $800 million in cash on its balance sheet, would also issue a special dividend of about $1 per share to current Instinet shareholders for a total of about $250 million. Reuters owns about 83 percent of Instinet. Since its initial public offering in May 2001, New York-based Instinet has cut 25 percent of its employees. During that time, the stock has lost more than half of its value, and Chairman and Chief Executive Doug Atkin has resigned. Instinet shares closed on Friday at $7.05 Discuss!