Battle for market research firm TNS heats up; GfK approves merger while WPP threatens to go hostile

05 July 2008

''Knowledge is power'', said Sir Francis Bacon 400 year ago, and the current multi-billion dollar tussle over British market research group Taylor Nelson Sofres plc (TNS) is ample testimony to the truth of the statement even today. Advertising giant WPP is locked in a bitter battle with German market research group GfK Holding AG for a combination with TNS, either of which would create one of the largest such firms in the world.

However, in this fight, Sir Martin Sorrel-led WPP finds itself in a minority, for in a show of German-British unity, TNS has rejected a higher WPP offer for its business in favour of friendly deal with GfK. Sorrel hasn't take this slight lightly and has threatened to go hostile with his offer, hopping to influence shareholders to pressurise TNS management into dealing with him.

In two latest developments on this front, supervisory board of GfK-Verein, the majority owner of GfK Holding, approved plans yesterday to merge GfK Holding with TNS, while the latter rejected WPP's third offer a day before.

GfK AG supervisory board chairman Hajo Riesenbeck said the administrative board has signalled its 'unambiguous support for the merger with TNS, paving the way for this unique merger'.

The full membership of GfK-Verein, which holds around 57 per cent of the company, is set to vote on the deal on 21 July as the board wants to win the support of members though this is not legally necessary following the board's approval.

'Although the articles of association of the GfK Verein do not stipulate that voting by the members is mandatory, the GfK management board and supervisory board, as well as the administrative board of the GfK Verein deem it important to have the support of the members,' the statement said.