Let’s get ready to rumble
It’s all go for technology market researcher GfK at the moment. No sooner has it snapped up UK software and games market research outfit Chart-Track than it announces it is calling off a merger with UK market research giant Taylor Nelson Sofres (TNS) – the third biggest in the world – in order to bid to buy it outright.
The reason for this about-face only days before the merger was set to be approved at an EGM is that advertising giant WPP – the world’s second biggest ad agency – also has its sights set on TNS and put in a bid for it at around 260p per share this morning. It has had previous lower bids rejected on the grounds that they undervalued TNS.
In response to WPP’s bid, which was reportedly offered straight to shareholders after the board had previously rejected an offer of 260p, GfK issued the following statement: “The Management Board of GfK notes the announcement released by WPP earlier this morning and confirms that it has consequently agreed to terminate the proposed merger with Taylor Nelson Sofres plc (“TNS”).
“GfK is actively pursuing a proposal which would involve an alternative all-cash offer being made for TNS with the involvement of an identified potential source of equity and equity related financing. While negotiations are at an early stage, GfK has received a strong indication of interest in this transaction. The form of consideration being considered is all cash, although the formal right to vary this is reserved.”
It’s reasonable to expect any future GfK offer to exceed 260p and to expect WPP to counter-offer so we could see a bidding war result. The TNS board is apparently keener on GfK than WPP but, as it’s not clear how the acquisition would affect GfK’s technology offering, we’re not taking any sides.
We did raise this matter when we interviewed John Pinder, the MD of the new GfK chart-Track merged operation, earlier today but, understandably, he didn’t feel he was in a position to comment.
TNS stock is currently priced at around 270p, having closed at 248p yesterday.
