WPP Extends TNS Deadline | Adweek
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WPP Extends TNS Deadline

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NEW YORK WPP Group said it has extended the deadline for Taylor Nelson Sofres shareholders to accept the holding company's $2 billion-plus offer to acquire the research firm. The new deadline is Sept. 12.

The original deadline expired earlier today, and shareholders representing less than 9 percent of the company's stock had agreed to accept the offer, per WPP.

WPP said that the terms of the offer remain the same -- a mix of cash and newly issued WPP stock valued at just under $5 per TNS share.

For weeks leading up to the original deadline, TNS shares were trading at a higher price than the WPP offer, largely in anticipation that rival market research firm GfK, based in Germany, would succeed in assembling financial backers to support a bid higher than the WPP offer.

But on Wednesday, GfK formally abandoned the effort and withdrew from the bidding for TNS, leaving WPP as the only publicly disclosed suitor for the London-based market research firm. One reason TNS shareholders may still be resisting is that the TNS board continues to urge them to reject the bid as too low. TNS CEO Donald Brydon also suggested two days ago that the board was looking for additional bidders.

There was no immediate comment from TNS on the deadline extension.

But in comments to analysts Wednesday, Brydon said WPP was attempting to "secure a strategically attractive asset at a price below what shareholders should insist upon." He said that multiples paid for market research firms "historically" tended to be 12.5 to 14.5 times earnings before interest, taxes, depreciation and amortization (EBITDA). The WPP bid, he said, was below that, at about 11.5 times EBITDA.

Brydon also said that the WPP bid failed to consider growth prospects for the market research industry and TNS' recent strong performance, citing first-half results released Aug. 27 that showed a 17 percent revenue gain to about $1.2 billion, although pre-tax profits plunged 9 percent to $62 million.

Brydon also said the TNS board had a responsibility to seek out other "interested parties" in the company, but declined to be more specific.

That said, he also confirmed that if WPP ups its price by a "reasonable" margin, "it would be considered" by the TNS board.