With nearly 82% of Taylor Nelson Sofres (TNS) shareholders saying yes to a buyout by WPP Group, it looks like Sir Martin Sorrell has won the prize. All that remains is to close the $1.9 billion deal. Thus ends a takeover drama that began back in May.
WPP Group, the international advertising agency and research giant headed by Sorrell, kicked things off with an unsolicited offer for TNS, which he wanted to combine with WPP’s large research arm, the Kantar Group, to become a stronger competitor to The Nielsen Company.
TNS management sought to stay out of Sorrell’s grasp by negotiating a “merger of equals” with GfK. But Sorrell didn’t go away. Instead, he launched a hostile bid for TNS and set a price that deterred other potential bidders. In fact, GfK tried but failed to find financing for a bid of its own after the friendly merger proposal had to be abandoned in the face of the WPP offer.
With no other bid on the table, TNS management finally relented and endorsed the WPP bid as it was put to shareholders. WPP reported that it had received acceptances of 81.78% of TNS shareholders for its cash and stock buyout offer. The offer has now been declared unconditional and extended to October 22 to bring in more shares on a voluntary basis.
‘We are delighted to be a step closer to welcoming such a fine company with strong people, clients and brands that will enhance our client offering,” said Sorrell in a statement.
European merger authorities have required WPP to make some minor divestitures for the acquisition to go through. The European Commission ruled that WPP must first agree to sell off its television audience measurement services in Europe and the TNS market research services business in Ireland.
RBR/TVBR observation: Money talks. In the end, TNS management had to accept the top bid. Sorrell started the process and wanted TNS more than anyone else. It was not the result that TNS management wanted, but it is now clearly the one that their shareholders want.