German market research company GfK today confirmed that it has “terminated all discussions” with potential financial backers and is no longer pursuing an offer for British competitor Taylor Nelson Sofres.
That leaves agency holding company WPP Group as the only publicly disclosed bidder for TNS.
GfK’s move comes as something of a surprise, as it had insisted for weeks that talks were progressing in its quest to secure backing for an acquisition of TNS.
TNS said GfK informed its board last night that it would no longer pursue a bid. But TNS also reiterated its position that shareholders should not accept WPP’s $2.2 billion-plus, offer, which it maintains is too low. TNS said WPP failed to take into consideration its ongoing strong performance, citing first-half results released today that showed a 17 percent revenue gain to about $1.2 billion. (Although pre-tax profits plunged 9 percent to $62 million.)
GfK and TNS announced a “merger of equals” in April and WPP subsequently made several counteroffers to TNS’ board. Those overtures were rebuffed, triggering a hostile takeover bid by in July.
TNS shareholders have until Friday to accept the WPP offer, though it is possible WPP will extend the deadline.
Earlier this week, with GfK presumably still in the running, TNS shares were priced about 2 percent higher than WPP’s bid price. After GfK abandoned its efforts to acquire the firm, TNS shares dropped to about 2 percent below the WPP offer price.
Commenting on the withdrawal of GfK, a WPP representative said: “We are pleased that Gfk has clarified its position, at last.”
Just last week, company CEO Martin Sorrell challenged the veracity of GfK’s claims that it was making progress in talks to get financial backing for a bid.
Sorrell even called on the U.K. Takeover Panel to investigate, although it is unclear whether that regulatory body played a role in GfK’s decision to withdrawal.