Market research firm GfK today said it was working on a plan to foil rival WPP’s £1bn (€1.25bn) interest in merger partner Taylor Nelson Sofres.
The German firm has teamed up with a financial backer in the hope of drawing up an alternative to WPP’s hostile offer to TNS shareholders. The proposal will replace the merger of equals previously agreed between GfK and TNS.
GfK’s response came hours after Sir Martin Sorrell, the boss of media and advertising giant WPP, confirmed details of his offer for TNS.
WPP’s 260.6p-a-share proposal was made direct to TNS investors after the target’s board declined to enter into talks with Sir Martin and said the proposal substantially undervalued the business.
TNS chairman Donald Brydon said today: “Shareholders should take no action and should not complete any form of acceptance in connection with WPP’s offer.”
WPP’s decision to press ahead with an offer was announced just before a 7.30am “put up or shut up” deadline imposed by the Takeover Panel.
Sir Martin said: “Although our offer may be characterised by some as a hostile bid, we believe that it is in no way hostile to TNS share owners nor to TNS’s clients and people.
“In fact, WPP believes it is more committed to maintaining the TNS brand than GfK. The offer from WPP is a superior alternative to what is, in effect, a nil-premium reverse takeover of TNS by GfK and a merger of unequals.”
The TNS tie-up with GfK would create a company operating across 111 countries and a “global leader” in the market information industry.
TNS provides a range of market research information including focus groups and opinion polls. Its clients include blue-chip firms such as HSBC, Microsoft and Unilever, while it also produces supermarket sales data which is closely watched by the City.
GfK is one of the world’s biggest market research firms with 9,000 staff and more than 100 operating companies.
WPP, however, believes a merger between TNS and its own research consultancy Kantar would create a company holding the number one or two spot in eight of the world’s top ten markets.