TNS rebuffs WPP despite GfK walk out
Market research company Taylor Nelson Sofre said it would continue to fight WPP’s hostile bid even after its preferred bidder GfK walked away from a takeover deal yesterday because it could not raise enough cash.
German GfK had been trying to raise financing with private equity groups and wealth investors to launch a rival takeover bid for TNS after WPP’s chief executive Sir Martin Sorrell launched a £1.1bn hostile offer.
However, GfK confirmed that it had not been able to raise enough funds.
“The management board, after careful consideration, has concluded that the terms of the financing available did not enable a sufficiently compelling alternative cash offer to be made for TNS that was also economically in the best interests of the GfK shareholders,” it said in a statement.
A WPP spokesman said the advertising giant was pleased that GfK had “clarified its position at last”.
Analysts suggest GfK’s withdrawal from the game made it much more likely that TNS shareholders would accept WPP’s bid.
“For WPP, the possibility of winning TNS without having to increase the offer price again has increased,” said Barclays Wealth analyst Amanda Purton in a note.
Meanwhile, TNS revealed first half profit fell on administrative costs, including charges linked to the failed merger with GfK. Net income fell to £19.6m from £22.2m a year earlier.
