For Martin Sorrell, chief executive of WPP, the silver lining today was that TNS shareholders representing 33% of the issued shares voted to approve the sale of the research firm, up from 11% who pushed for the deal by the last deadline two weeks ago. The jump is significant because TNS Chairman Donald Brydon spent most of the week urging the company's shareholders to reject WPP's offer.
"Notwithstanding the extreme volatility of today's financial markets, the TNS board is very confident in TNS' ability to create substantial shareholder value," Mr. Brydon said in a statement earlier this week. "We have a sound strategy, which is delivering results. We firmly believe now is not the time to sell the company."
WPP spokesman Richard Oldworth described the increase in shareholders approving the deal as "promising."
In a statement released today, WPP also said the "offer provides a substantial premium for TNS share owners with both cash certainty and potential equity upside." TNS shares closed at $4.58 today, so WPP Group's premium has gotten smaller since the first offer, since its offer now values the stock at $4.83 per share.
Earlier this week Ad Age reported that WPP insiders believed that TNS is in reality up for sale, and that the company's high share price is a reflection of WPP's interest in the business and not the company's performance alone. They say that TNS no longer has many long-term investors and that shares will crash if the deal does not go through. TNS saw earnings-per-share growth of more than 20% in 2007 and for the six months ending June 30 of this year.
On Tuesday, 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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Contributing: Emma Hall