- Steve McClellan

NEW YORK U.K.-based market research company TNS rejected a $1.9 billion acquisition offer from ad agency holding company WPP Group, saying it was not in the best interests of shareholders, according to a statement issued by TNS on Sunday.

TNS competes with the Nielsen Co., parent of Adweek.

TNS chairman Donald Brydon said in a statement: "The board has no hesitation in rejecting this opportunistic proposal as it substantially undervalues the company even on a stand-alone basis."

TNS confirmed that it received an unsolicited proposal from WPP on May 3, outlining what it termed a "possible pre-conditional offer" based on a combination of cash and WPP shares.

The firm additionally indicated that WPP had made an earlier proposal -- which it also rejected -- in which WPP suggested rolling its research firm Kantar into TNS and then acquiring the expanded company.

Both WPP approaches were made after TNS and German research GfK announced April 29 that they were in discussions about a potential "merger of equals."

In a statement, TNS indicated that the talks were proceeding apace: "The board of TNS believes that a combination of TNS and GfK would deliver significant value to TNS' shareholders, maximizing shareholder value through accelerating revenue opportunities and substantial operating efficiencies under clear leadership. Significant progress has been made on the work to confirm the quantum of merger benefits and an announcement on this as well as the other key merger conditions will be made shortly."

Responding to the TNS rejection, a WPP rep said, "The rejection was cavalier and we still await the information that TNS has already given to GfK."