WPP Bid For TNS Gets Boost

Unraveling of merger could help takeover bid.
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Ad agency holding company giant WPP got encouraging news for its $2 billion unsolicited takeover bid for marketing data outfit Taylor Nelson Sofres, when a friendly TNS merger with GfK unraveled, reports indicate Wednesday.

 German based media information outfit GfK is poised to withdraw its merger agreement after being unable to secure financing, reports indicate.

 That gives WPP – which owns ad agencies Ogilvy & Mather, JWT and Young & Rubicam – a clear path to press its own TNS offer consisting of $3.20 cash and 0.1889 of its own shares for each TNS share. TNS measures ad spending and also tracks effectiveness of advertising, putting it in competition with Nielsen and WPP’s Kantar research unit.

 According to a Wall Street Journal article, UK-based TNS generated $1.84 billion in revenue last year. Adding TNS to its businesses would mean WPP would pass current ad agency global leader Omnicom Group in size based on revenue. WPP posted $12.3 billion in revenue in 2007, just behind the $12.7 billion of Omnicom, which owns ad agencies BBDO Worldwide, DDB Worldwide and TBWA/Worldwide.

 The now-scuttled GfK and TNS merger would have created an entity with $4.2 billion in combined revenue.

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