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WPP Extends Deadline as Shareholders Hang On to TNS
WPP has extended its offer to buy shares in TNS to 3pm London time on September 12th. The company's original deadline passed on Friday with only 8.61% of TNS shareholders accepting its offer. TNS continues to recommend rejection.
In a Regulatory News Service filing on Friday, WPP said the terms of its offer remain the same. The cash-and-stock bid values TNS at about £1.2 billion ($2.2 billion). Rival GfK pulled out of the competition for TNS last week, having failed to secure sufficient funding.
In its own latest statement the TNS board, which cites a 'low level of acceptances' of the WPP proposal, says it 'continues to recommend that TNS shareholders reject the WPP offer, by taking no action in response to the offer.'
Last week, TNS told shareholders once again that it believed WPP's offer price of 268.7p per share undervalues the company, claiming that 325p would be closer to its true value. CEO David Lowden said WPP was being 'opportunistic' and 'seeking to acquire TNS at a value lower than what it should be'; Chairman Donald Brydon reportedly told analysts that the offer was less than the 12.5 to 14.5 times EBITDA multiples 'historically' paid for market research firms and claimed it reflected neither general MR industry growth prospects nor TNS' own recent strong performance.
In an interview with The Times (www.timesonline.co.uk ) at the weekend, Sorrell said that along with many other major corporates, British-based WPP was reviewing its domicile in response to uncertainty about tax changes for international firms. In August, three high profile firms - engineer Charter, office space company Regus and fund manager Henderson - announced they were moving abroad because of business taxes. Hinting at the complexity of the decision, Sorrell commented: '[corporates] don't want to be seen to be letting the country of origin down and that weighs heavily' but added 'I've never known such a deep feeling on an issue like this.'
Web sites: www.tns-global.com , www.wpp.com .
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