WPP's third bid for TNS is rejected

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The Independent Online

The tussle between WPP and TNS over the market research company's future took another twist yesterday with TNS's swift rejection of the advertising giant's third takeover proposal.

The approach, raised to 0.1889 WPP shares and 173p per TNS share, was made hot on the heels of a Takeover Panel "put up or shut up" order issued on Wednesday that gives Sir Martin Sorrell's company one week to make a clear statement of its intentions.

WPP's approach, which values TNS at £1.08bn, is only a proposal, and therefore not the firm offer required by the panel. But it sparked a swift rebuttal from the TNS board on the basis that it "substantially undervalues" the business.

The developments come against the backdrop of TNS's negotiation of a nil-premium all-share merger with GfK, a German rival.

Donald Bryden, the TNS chairman, says that WPP is simply trying to scupper the GfK deal. "Sir Martin keeps making what a bridge player might call 'weak bids' and it is not clear that he actually wants to win the hand," Mr Bryden said. "He is trying to screw up the merger because that would create a market leader that could damage its business." If it was serious, there would be a higher, formal offer, according to Mr Bryden. "This is just mood music."

But Sir Martin points to positive responses from City analysts for his new price – which was raised from the 0.1214 WPP shares and 164p put forward in May. "We are testing this with the company's shareholders because the board is unwilling to engage – and things are going as well as we could expect," Sir Martin said. "The language from the board was unnecessarily strong but we won't let their emotion spoil the reality."

TNS closed up 8 per cent at 243p. WPP closed up 3.5p at 464p, valuing its approach at 260.5p per TNS share.

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