GfK Ends Bid For TNSAll Clear For WPP Takeover?
This story was written by David Kaplan.
German audience measurement firm GfK appears to be withdrawing its bid for British research company Taylor Nelson Sofres, according to Reuters, which cited a story in Germany's Manager magazine based on unidentified sources. GfK is said to be dropping its bid because Apax, the PE firm that agreed to help back it in the deal, began making demands for extensive control over the merger. The German company started to get cold feet last month, when UK ad holding company WPP Group began maneuvering for a hostile takeover of TNS. WPP had sent TNS a formal offer for a 264.2p-per-share offer that values TNS at 1.158 billion ($2.1 billion) - a 55 percent premium from April 28, when TNS said it would merge with GfK.
That led GfK to rethink the combination of equals that was originally being worked out in May. That deal had been valued at $154 million (83.8 million, 100 million) and would create the globe's second-largest audience measurement firm behind Nielsen. With WPP in the picture, GfK then began trying to come up with a cash offer for TNS. Meanwhile, WPP seemed to have the support of TNS shareholders, even as TNS executives rejected the ad company's advances three times. By having GfK out of the way, it looks like all systems are go for a WPP takeover. But lately, WPP has been talking with Microsoft (NSDQ: MSFT) about acquiring its Avenue A/Razorfish unit. The price for that purchase could cost WPP around $800 million, even while it would throw in its ad serving unit Open AdStream as well. Still, since WPP has fought hard for TNS, it's doubtful that Sir Martin Sorrell, WPP's CEO, would walk away too at this point.
By David Kaplan