TNS Rejects 3rd Bid From WPP

NEW YORK WPP Group made a third bid for market research firm Taylor Nelson Sofres after the close of business on July 2. TNS management quickly rejected that offer.

WPP’s latest bid came shortly after the U.K.’s Takeover Panel ruled that the holding company must make a new offer by July 9 or exit the process.

WPP valued its latest bid at slightly more than $2.1 billion, up $200 million-plus from its last offer on May 13.

“WPP believes the revised WPP Proposal is highly attractive for TNS share owners,” the London-based firm said in a statement. The company calculated that the revised offer represented a 52 percent premium for TNS shares based on the price of TNS shares on April 28 when it announced its no-premium merger with German market researcher GfK. WPP said the revised offered was 16 percent higher than the value of TNS based on yesterday’s closing share price.”

In rejecting the offer, TNS defined itself as “a unique company and has an attractive platform in this fast growing and dynamic sector and as such should command a commensurate premium valuation.”

London-based TNS also accused WPP of making several undervalued bids “and [generating] considerable press commentary and innuendo…purely to frustrate the merger of GfK and TNS,” a union TNS said it remains committed to.

Indeed, several GfK shareholder groups in recent weeks have indicated that they have problems with the proposed TNS-GfK deal — particularly a reduction of company jobs within Germany — and may not support the merger.

WPP conditioned its latest bid on receiving additional corporate and financial information from TNS about the performance and health of the company, as well as support from TNS board members.

If it succeeds in acquiring TNS, WPP would merge the company with its own Kantar market research arm, which it said would become the second-largest insight, information and consultancy group in the world behind Adweek parent the Nielsen Co.

The resulting company would have revenue exceeding $14.4 billion, and WPP said post-merger synergies would boost TNS operating margins from 9.9 to 15 percent, which would be in line with WPP’s current margins.

In a statement, Donald Brydon, chairman of TNS said: “The board of TNS has been extraordinarily patient with Sir Martin Sorrell. We have now received three proposals from WPP, each of which substantially undervalues the company. WPP has received materially the same information as has been provided to GfK. WPP has got all the information they need and have had all the time they need. It is clear that WPP is determined to try and frustrate the GfK-TNS merger for the benefit of WPP’s underperforming Kantar division. It is time for Martin Sorrell and WPP to stop interfering and make their intentions clear.”