Bad blood

9 March 2006 By Fiona Maharg-Bravo

The Dutch media group s supervisory board is meant to resolve conflicts between the shareholders and management. But its handling of the sale to private equity looks clumsy. If investors ultimately shoot the sale down, the board should take the bullet.

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VNU's largest shareholders, including Fidelity, have said they are unlikely to support the company's decision to sell itself to a private equity consortium for E7.5bn.

Knight Vinke, the activist shareholder which controls 2% of VNU's shares, said the offer substantially undervalued the company. Its chief investment officer, Eric Knight, has proposed he be nominated to VNU's supervisory board. He has also proposed the sale process be extended and changed to include bids for the three main divisions.

The Supervisory Board's chairman, Aad Jacobs, is due to retire next month. Of the remaining six members, two are former VNU executives.

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