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VNU Deal Under Fire from Shareholders
Two of VNU's major shareholders could scupper the US$10.3 billion private equity buyout backed by the group's Board earlier this week. Fund manager Fidelity International, which owns 15% of VNU, said it was 'unlikely to support this offer', while FT reports suggest 2% holder KVAM is 'actively looking' for a Chief Executive to run VNU.
KVAM (Knight Vinke Asset Management) was instrumental in forcing the abandonment of the planned merger with IMS last year. A statement from Knight Vinke said: 'As previously indicated to VNU's boards, KVAM believes that a higher value could be obtained by VNU's shareholders if the boards were publicly to open up the sale process to include a sale or spinoff of VNU's main constituent parts and to give equal consideration to a wider range of alternatives.'
One option likely to be put forward is the spin-off of Nielsen companies, including Nielsen Media which along with NetRatings grew about twice as fast as the company as a whole in 2005 and accounted for about a quarter of group revenue.
Unconfirmed reports in the Financial Times this morning, citing Knight Vinke chairman Eric Knight, state that the company is 'actively looking' for a Chief Executive to run VNU. Knight Vinke launched a search three weeks ago and 'there are serious and very credible parties interested', according to Mr Knight. Reportedly, the search is focused on US nationals or candidates with US experience, given that VNU's operations are largely US-based.
Mr Knight is quoted as saying that the search is Knight Vinke's initiative but the matter would also be discussed with other shareholders, namely Fidelity. Without the support of these two, the currently proposed sale is likely to fall through, as it is conditional on gaining acceptance from 95% of shareholders.
VNU is online at www.vnu.com
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