TNS rejects WPP again after GfK drops takeover bid

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TNS, which reported strong first-half results and gave a confident full-year outlook, said the offer from advertising group WPP undervalued the company and said it would recommend again that shareholders reject the cash-and-shares bid.

"I believe that WPP is being opportunistic at a time in the market when the market is low," Chief Executive David Lowden told reporters on a conference call, adding that TNS was seeking alternative buyers but could equally well thrive alone.

He said he would consider 325 pence and upwards to be a fair price per share, based on historic multiples paid for peers - far higher than WPP's offer worth 268.7 pence per share and TNS's share price of 264 pence by 9:55 a.m., down 1.8 percent.

GfK, which had spent months trying to find finance to fund an all-cash bid for TNS after WPP's bid scuppered its original agreed merger plans, said it had not found suitable terms.

"The terms of the financing available did not enable a sufficiently compelling alternative cash offer to be made for TNS that was also economically in the best interests of the GfK shareholders," the German firm said in a statement.

WPP, whose chief executive has publicly doubted GfK's ability to raise finance for a TNS bid, said: "We are glad that GfK has clarified its position at last."

A combination of TNS and WPP's Kantar division would create the world's second-biggest market-research group and a more formidable rival to privately held Nielsen - a goal that would also have been achieved by a TNS-GfK merger.

Market research is far less vulnerable to the cyclical weakness now hurting many advertising companies, as customers hurt by a weak economy rein in marketing budgets but seek to target better what they do spend.

Lowden said it was now up to WPP to come up with an unconditional offer - its current offer depends on anti-trust approval and on winning 90 percent of TNS shares. He would expect such an offer by end-September, he said.

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