Advertising giant to woo TNS shareholders despite downturn

Sir Martin Sorrell, chief executive of WPP, is expected to set out his stall for a takeover of market research group Taylor Nelson Sofres this week, as the advertising giant posts what is forecast to be a slump in interim results when it reports on Friday.

City analysts say Sir Martin will attempt to win over TNS shareholders by fleshing out WPP's proposed £1.15bn bid, just days before they vote on the offer on 29 August.

WPP is embroiled in a battle with the German research company GfK, whose merger plans with TNS were scuppered by Sir Martin's advances. GfK is now understood to be planning an outright bid for TNS, but City sources say the German firm is struggling to generate sufficient funding.

The move comes as Sir Martin prepares to reveal results for the six months to 30 June, which are forecast to have suffered from the global economic slowdown. Analysts expect a fall in sales growth over the period compared to the same time last year. However, revenues are tipped to be ahead at £3.1bn, up from £2.9bn in 2007.

In June WPP reported like-for-like sales for the first five months up 4.5 per cent while revenues were 14.6 per cent higher. Then Sir Martin said WPP was on track for revenues up 15.5 per cent, slightly higher than last year's 15 per cent rise. WPP's shares closed at 499p, down on the year's high of 718p.

Charles Stanley analyst Sam Hart said WPP's results will have benefited from advertising relating to the US presidential elections, the Olympic Games and the European football championships. However, the City is braced for a downbeat outlook from Sir Martin as WPP is expected to report that corporate advertising is down throughout the group's businesses.

Mr Hart said: "Considerable uncertainty remains over the likely length and depth of the advertising downturn, and we forecast risk on the downside. The possibility of a protracted bidding war for TNS adds further risk."