GfK mulls sweetened all-cash bid to rescue TNS from hostile bid by WPP

10 July 2008

German market research group GfK has confirmed that it is mulling an all-cash offer for market research, information and business insight company Taylor Nelson Sofres (TNS), jettisoning plans for a nil-premium merger.

 The announcement follows on the heels of the UK-based advertising group WPP announcing a hostile bid for TNS, but without raising its £1 billion cash and share offer for the group. (See: Battle for market research firm TNS heats up; GfK approves merger while WPP threatens to go hostile) 

GfK said that it is ''actively pursuing a proposal which would involve an alternative all-cash offer being made for TNS with the involvement of an identified potential source of equity and equity related financing."It said that talks were presently at an early stage, though it added that it had received "a strong indication of interest in this transaction." The Times had reported that GfK and an unidentified financial bidder were planning for a last minute counter-bid for TNS if WPP went ahead with a firm offer for the company. WPP launched its hostile bid, while refusing to hike its 260p cash and share offer for TNS above the £1 billion deal already tabled.

There had been speculation that WPP could increase its offer to 280p a share to tempt TNS shareholders to opt for its deal instead of the nil-premium merger the market research group had been pursuing with GfK.

For his part, Sir Martin, who captains WPP commented on the deal saying that WPP had ''reluctantly'' waived its earlier pre-condition for the board of TNS to recommend our offer, while acknowledging that despite repeated efforts over more than three months, WPP had been unable to engage TNS' management or enter into any discussions that could lead to an agreement.

He said that although WPP's offer might be classified as a 'hostile bid' by some, WPP believed it is in no way hostile to TNS share owners nor to TNS's clients and people. Sir Martin said WPP is ''more committed to maintaining the TNS brand than GfK." WPP says that with TNS joining forces with its own market research arm Kantar, potential savings would be in the range of over £50 million a year.