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TNS: WPP Has 61% but Cedar Rock Bolsters Holding

October 3 2008

WPP has again extended the deadline for acceptance of its TNS bid to next Wednesday, October 8th, with 61% of shareholders accepting. However, major TNS shareholder Cedar Rock has taken its holding past the 10% mark, which may impact the ad giant's options.

The latest deadline passed at 3pm today. WPP can extend the deadline again, until 16th October, and can move the goalposts from the current 90% acceptance requirement as low as 50%, so yesterday's announcement by Cedar Rock will not stop it taking over TNS - however, if Cedar Rock hangs onto its current holding, it will mean that CEO Sir Martin Sorrell cannot call on the 'squeeze-out' procedure to force minor shareholders to sell. One other milestone remains: he will have the option to delist TNS from the stock market if his total passes 75%.

London-based fund manager Cedar Rock has been an open backer of the TNS board as the latter has rejected WPP's £1.15bn bid. It has this week moved from 9.4% to 10.11% (42.2m shares) with the purchase of 1.5m TNS shares at 244.2p.

In a statement, TNS Chairman Donald Brydon said: 'It's been pretty clear to us all along that this offer doesn't properly value the company. There is still a significant shareholding that agrees with us.' WPP had won over 34% of shareholders last Friday and lifted that to 43% by Monday afternoon.

UK newspaper the Telegraph (www.telegraph.co.uk ) this week (but before the news of the 61% figure) discussed the possibility, at least, that Sorrell may pull out of the deal. It suggested the bid was 'looking increasingly pricey as financial markets go into meltdown' but concludes that 'the chances of him pulling out seem pretty far-fetched'. The paper cited his unsuccessful attempt to withdraw from a bid for media buyer Tempus just after 9/11. However it also noted that '[since May] all potential buyers have crawled over TNS and none has come close to WPP's offer.'

Web sites: www.tnsglobal.com and www.wpp.com .

All articles 2006-21 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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