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Has a Proposal From Consortium of Private-Equity Firms

By Published on .

CINCINNATI (AdAge.com) -- Dutch research and trade-media giant VNU is in talks with a consortium of major private-equity funds that have bid nearly $8.9 billion to acquire the company.
Industry executives have speculated a private-equity takeout would lead to a breakup of the company, separating the market-research operations from the publishing group.

VNU, the world’s leading market-research firm, said in an announcement this morning that it has received a non-binding proposal to purchase the company for $33.60 to $34.20 a share from a group including Blackstone Group, Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co., Permira and Thomas H. Lee Partners.

The high-end of the bid values VNU only at around 1% above its Friday closing price. American depositary receipts of the company were trading at $34.20, the high-end of the bid, Monday morning.

$4 billion in annual sales
VNU, with annual sales of about $4 billion, owns global retail scanner data powerhouse ACNielsen, global TV ratings powerhouse Nielsen Media Research and such trade publications as Billboard, The Hollywood Reporter and Adweek.

VNU said it will proceed with discussions as it “continues to weigh alternatives and fully and fairly evaluate what course of action will serve the best interests of VNU’s stakeholders.”

Having “gauged the level of interest of certain other parties,” VNU is not in talks with any others about a buyout at this time, the company said.

Prior published reports indicated a second private-equity group, including Bain Capital, Texas Pacific Group and Warburg Pincus, also had considered a bid for VNU.

Breakup of the company
In either case, industry executives have speculated a private-equity takeout would lead to a breakup of the company, separating the market-research operations from the publishing group.

One executive familiar with the matter, however, said the consortium has indicated it’s interested in continuing VNU’s broader strategy in terms of where the company chooses to compete and keep the company “largely intact,” though he added: “I would think they would consider selling some select assets.”

A spokesman for VNU said the consortium will continue to do due diligence for another three to four weeks before the two sides would engage in formal merger talks. “We can’t be certain there’s going to be a transaction at all,” he said, “so it would be premature for us to discuss [acquisition] premiums.”

A bid for VNU may already be largely priced into the share price in recent weeks, with shares of the company up 22% since the unwinding of the IMS deal in November and trading about 17% ahead of the three-year average share price of the company.

In November, VNU abandoned a proposed $7 billion takeover of market-research firm IMS health after a shareholder revolt led by hedge funds. CEO Rob van den Bergh at the same time said he would resign as soon as a suitable replacement is found, but the company has yet to name a successor.

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