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July 10, 2008

WPP Goes Hostile for TNS, With Counter-Offer from GfK

German market research group GfK is putting together a cash offer for rival firm TNS (Taylor Nelson Sofres), in response to a hostile bid from Martin Sorrell's WPP launched yesterday.

WPP has offered £1.1 billion ($2.1 billion), after previous offers were snubbed by the company's board.

In response, GfK has issued a release stating it is terminating its own proposed merger with TNS, which has been in discussion since April, and will pursue "a proposal which would involve an alternative all-cash offer being made" with anonymous financial backing.

Although talks are still in early stages, GfK says it has received "strong indications of interest in such a transaction."

WPP made a significant step into the online ad arena with its acquisition of 24/7 Real Media last year, and TNS's online media research capabilities could complement 24/7's range of digital ad offerings, which include search marketing and a display ad network.

While some have suggested that the $2.1 billion price tag overvalues TNS in such a cautious financial climate, others believe market research will remain relatively healthy in an economic slump, fuelled by the concerns of nervous advertisers looking to validate campaign decisions.

Posted by Jack Marshall at July 10, 2008 4:58 PM

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