TNS essentially put itself in play by trying to merge with GfK, so one way or another it looks like time for consolidation in the global market research business.
WPP’s surprise bid of $1.87 billion for TNS came on Saturday, but had already been rejected by the TNS board on Sunday, so WPP questioned whether the board really gave much thought to the offer before backing management’s effort to merge with GfK. The WPP offer, however, was only 15 pence above Friday’s London closing price of 2.30 pounds for TNS, so not a big premium. That could change if WPP Group CEO Sir Martin Sorrell follows his past practice of starting with a low bid and then moving up. If WPP is successful, he would combine TNS with WPP’s large research arm, the Kantar Group.
Sorrell’s bid also seemed to be an attempt to jump ahead of The Nielsen Company, which was rumored to be preparing its own bid for TNS, to combine their worldwide marketing research and media ratings businesses. Stay tuned to see if Nielsen launches a bidding war.
RBR/TVBR observation: The market may not allow for Nielsen to do an IPO this year, but that won’t keep CEO David Calhoun from bulking up in the interim. His private equity backers still have plenty of dry powder. Meanwhile, it looks like TNS CEO David Lowden and GfK CEO Dr. Klaus Wubbenhorst will have a tough time keeping their merger plans on track if Calhoun and WPP’s Sir Martin Sorrell drive up the share price of TNS with a bidding war.
An interesting sidelight for American observers is the TNS alliance with Arbitron for worldwide deployment of the Portable People Meter for TV and radio audience measurement. How might that be impacted if TNS is bought by Nielsen, which previously rejected a PPM joint venture with Arbitron after a market test in Houston?