In WPP's latest attempt to acquire TNS, the third-largest market research company in the world, the holding company made a hostile bid of $2.13 billion, which was rejected by the TNS board.
"The board has unanimously rejected the offer which substantially undervalues TNS. Shareholders should take no action and should not complete any form of acceptance in connection with WPP's offer," TNS chairman Donald Brydon said in a statement.
With a slowing economy, consumer and market research is becoming more critical to the success of marketers and marketing agencies, so it's no wonder why WPP and its chief executive, Martin Sorrell, are so eager to get their hands on TNS. Mr. Sorrell, no stranger to the acquisition game, is looking to combine TNS with WPP's Kantar, a market research network whose group companies include Millward Brown and Research International, in order to challenge bigger competitor Nielsen.
"Despite repeated efforts over more than three months to engage with TNS management, we have been unable to enter into any discussions that could lead to an agreement," Mr. Sorrell said today in a statement, trying to discourage the perception of his company's most recent moves as hostile. "We believe that it is in no way hostile to TNS share owners nor to TNS' clients and people," he said, adding "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.'"
Reuters reported this morning that TNS has "permitted" GfK to move forward with its merger discussion with an "identified potential source of equity."
Any combination of TNS with WPP or TNS and GfK would create the world's second-largest market research company after Nielsen.
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Contributing: Rupal Parekh