Market research giant Taylor Nelson Sofres has rejected a £1bn (€1.2bn) bid from advertising group WPP, it emerged today.
TNS said its board had unanimously rejected the unsolicited proposal, which it dismissed as being “opportunistic” and not in shareholders’ best interests.
WPP, which is headed by Sir Martin Sorrell, made the approach on Saturday, offering a combination of cash and shares, valuing TNS at just under £1bn (€1.2bn).
The group was offering 154p cash and 0.1214 WPP shares for each TNS share, which valued each TNS share at 230p.
This was only slightly above TNS’s close price on Friday of 215p, and well down on its year high of 267.5p.
Donald Brydon, chairman of TNS, said: “The board has no hesitation in rejecting this opportunistic proposal as it substantially undervalues the company even on a standalone basis.”
TNS said it was the second unsolicited approach it had received from WPP, after the advertiser previously approached it about reversing its Kantar division into TNS and taking control of the enlarged group without paying a premium.
This proposal was also unanimously rejected as not being in shareholders’ best interests.
Meanwhile TNS is in discussions with German information services group GfK over a merger that would create the world’s second largest market information company with a value of around £1.5bn.
The group said this merger, which would be achieved through a share for share offer by TNS, would deliver “significant value” to TNS shareholders, accelerate revenue opportunities and create substantial cost savings, which some sources have put at around £78m (€99m).
TNS said in a statement that significant progress had been made on the issue, and an announcement on the benefits and key merger conditions would be made shortly. The discussions with GfK pre-date both of WPP’s offers.
The combined GfK-TNS would be based in London, but it would have a German office in Nuremberg which would handle significant business operations.
In a trading update last month TNS said prospects remained strong despite uncertain economic conditions, as major companies increasingly wanted to know how well their message was getting across to hard-pressed consumers.
The group, whose clients include blue-chip giants such as HSBC, Microsoft and Unilever, said new business levels achieved in the first three months of 2008 had exceeded the previous year.
TNS has 15,000 staff in 80 countries. It made underlying pre-tax profits of £92.2m (€117.4m) in 2007, 9% ahead of the previous year.