On the brink

3 July 2008 By Una Galani Follow @ugalani

With media valuations tumbling, a conditional offer worth 260p a share looks superficially attractive. TNS’s own nilpremium merger with GfK isn’t worth nearly as much. Maybe brinkmanship can force WPP’s Sorrell to pay extra. But if not, TNS could look silly.

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Taylor Nelson Sofres' board on Thursday rejected a third conditional takeover proposal from WPP. The cashandshare offer from Sir Martin Sorrell's advertising group values the UKbased market research group at £1.1bn, or 260p per a share. TNS has agreed a nilpremium merger of equals with Germany's GfK.

WPP increased both components of its offer to 173p cash and 0.1889 WPP shares for each TNS share. Based on yesterday's closing prices of WPP, that represents a 17% improvement on its previous offer and 52% premium to the TNS share price in late April before reports of the deal first emerged.

Conditions in the WPP proposal include access to all the information TNS has given to GfK and securing a board recommendation. The UK Takeover Panel has given WPP until July 9 to make firm offer.

TNS shareholders are due to vote on the GfK deal on July 18. Under the terms of the deal, TNS would offer 11.74 new TNS shares for each GfK share. Assuming full acceptance of the offer, GfK's largest shareholder Verein would control 28%.

Context News

Conditions in the WPP proposal include access to all the information TNS has given to GfK and securing a board recommendation. The UK Takeover Panel has given WPP until July 9 to make firm offer.

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