labels: M&A, Advertising / branding, Market research
TNS gives in to WPP's offer news
07 October 2008

Sir Martin SorrelMarket research group Taylor Nelson Sofres (TNS) has finally thrown in the towel after fighting the hostile take over bid from rival advertising group WPP for over six months. The firm has decided to recommend to its shareholders that they accept Sir Martin Sorrell's 1.2-billion offer.

TNS chairman Donald Brydon said that the board had not recommended the offer earlier since ''it wasn't clear where we were going to end up''. He said that since markets have come down, and with shareholders running to exit as expected in adverse market conditions, the recommendation is a bid to ''recognise reality''.

WPP had launched a hostile bid for the world's third-largest market research firm in July. At the time, Sir Martin had said, "We are testing this with the company's shareholders because the board is unwilling to engage and things are going as well as we could expect," he said. "The language from the board was unnecessarily strong but we won't let their emotion spoil the reality.''

TNS was more inclined to a merger with German firm GfK Holding AG at that time, and had rejected WPP's proposal of 0.1889 WPP shares and 173p per TNS share, saying it "substantially undervalues" the business.

TNS says it continues to believe that WPP's offer undervalues the company, but it did not want TNS investors to be left holding minority interests in an unlisted company, which is why the board ''now recommends that shareholders accept the WPP offer, as the directors intend to do in respect of their own beneficial holdings,'' the company said. WPP has offered 173p in cash and 0.1889 of a new WPP share for every TNS share.

WPP has said its offer would become unconditional once it has enough acceptances from 75 per cent of shareholders, adequate enough to delist the company.

TNS has decided to quit fighting the unwelcome advances of WPP after over 60 per cent of the company's shareholders said they would accept WPP's cash-and-shares offer. WPP will have to secure 90 per cent of the share capital to eject minority shareholders.

However, Sorrel will be able to delist TNS from the stock market if over 75 per cent equity shareholders accept his offer. WPP's offer represents a 21 per cent premium to the closing price of 215p a share on 2 May, a day before TNS announced receiving WPP's proposal.

Following WPP's hostile bid in July, German market research group GfK mulled an all-cash offer for TNS, jettisoning its earlier plans for a nil-premium merger (See: GfK mulls sweetened all-cash bid to rescue TNS from hostile bid by WPP)

WPP formally launched its hostile bid for TNS in the first week of August, announcing that an offer document containing the formal offer for the entire issued and to be issued share capital of TNS was posted on 2 August valuing the company at $2.28 billion (See:   WPP launches sixth and formal hostile bid for TNS </management/m_a/20080802_wpp.html> . That was WPP's sixth bid for the company, and by the end of August 2008, proved to be strong enough to get German market research group GfK AG to give up its bid for Taylor Nelson Sofres Plc (See: GfK gives up, WPP expected to win TNS: Reports).

GfK was unable to raise adequate financing to counter the 1.1 billion ($2 billion) hostile takeover bid by advertising group WPP Plc.

Had the deal with GfK gone through, the merged TNS-GfK entity would have been the world's second-biggest market researcher, ranked just behind Nielson Co. Even now, it would still create the world's second-biggest market research group after privately held Nielsen. WPP's offer remains open for acceptance until 3 pm on Wednesday.


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TNS gives in to WPP's offer