TNS Board Backs WPP Takeover Bid

Decision Ends Five Months of Contentious Bargaining

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NEW YORK (AdAge.com) -- After a testy five-month "courtship" and plenty of rebuffs, Taylor Nelson Sofres changed its stance and today said its board will now back a takeover by ad giant WPP Group -- even though TNS still believes the $2 billion offer undervalues the company.

The board's change of heart, which could finally clear the way for WPP to acquire TNS and surpass Omnicom Group as the ad industry's largest holding company, follows months of constant recommendations to shareholders to reject the WPP offer. WPP had repeatedly extended the deadlines it gave to TNS shareholders to accept its hostile bid offer in hopes of getting a 90% acceptance level. At 90% approval WPP would be able to force out the minority who rejected the offer. "So obviously the objective would be to get to 90%," a WPP spokesperson told Ad Age late last month.

Then last week, after announcing that 61% of TNS shareholders had accepted the offer, WPP said it would change the acceptance conditions of the offer to 75% and extended the deadline once again to Oct. 8

In today's statement TNS said: "The board continues to believe that the WPP offer undervalues TNS. However, the board recognizes that given that WPP has reduced the acceptance condition to 75% of the TNS ordinary shares to which the WPP offer relates, and stated its intention to de-list TNS when it has declared the offer unconditional, there is a risk that TNS shareholders who do not accept the WPP offer could ... own a minority interest in an unlisted company. Therefore the board ... now recommends that shareholders accept the WPP offer, as the directors intend to do in respect of their own beneficial holdings."

The board said it was advised to change its stance by Deutsche Bank, JPMorgan Cazenove and Moelis & Co.

Asked whether WPP Group Chief Executive Martin Sorrell would comment on the today's development, a spokesman said, "We are inclined to wait until Wednesday when we will be putting out another update on level of acceptances."

Last month the European Commission cleared the way for the deal under the condition that WPP commits to selling off TNS-owned Television Audience Measurement services in Europe and a TNS market-research business in Ireland.
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