WPP said today it would extend its offer for TNS shares to September 26th. Only 11% of shareholders had accepted the offer by today’s 3pm London deadline, already an extension.
TNS has again urged shareholders to reject the bid, but says it met with WPP earlier in the week in recognition of the fact that ‘the current long period of uncertainty is not in the interests of TNS shareholders, employees and clients.’ TNS Chairman Donald Brydon, at his own instigation, is said to have met with Sorrell on Tuesday to discuss the possibility of a revised offer: however, in a statement the firm said it was ‘disappointed that WPP has declined to enter into a dialogue with TNS regarding the benefits of a recommendation’ which if negotiated would persuade TNS to ‘commit to cooperate with WPP to ensure a successful transition to WPP ownership.’
The statement concluded: ‘In the absence of an increased offer from WPP, the board of TNS continues to recommend that TNS shareholders reject the WPP offer.’
For its part, WPP points out that based on today’s closing prices for WPP, the tabled offer values each TNS share at about 278.3p, c.63% above the closing price of TNS shares before its initial announcement of talks with GfK in April.
The new WPP deadline is just after a date given by the EC for its decision on the competition investigation, set for 23rd September.
Meanwhile, the Wall Street Journal
has suggested that ‘getting maximum value out of TNS as Europe's economies head for a protracted slowdown is sure to prove a stern test for WPP’, citing the limited returns visible to date from WPP’s Ł1.9 billion of investments in mostly ‘small bolt-on additions to its business’ in the past three years. The Journal
says: ‘The problem is not that WPP is destroying shareholder value... WPP is just not substantially improving its performance through acquisition. Chief Executive Martin Sorrell has himself admitted the difficulties of managing such a sprawling business.’
Web sites: www.tnsglobal.com