Taylor Nelson in pounds 119m merger with French rival

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The Independent Online
Taylor Nelson AGB, the market research company, yesterday trebled its size by merging with Sofres, its French competitor. The pounds 119m acquisition created the world's fourth largest market information group, with a presence in 28 countries.

Tony Cowling, chief executive and managing director of Taylor Nelson, claimed yesterday that the deal made the company "genuinely global".

Taylor Nelson is the UK's biggest independent market research company, but it ranks only 15th in the world in terms of turnover. Sofres is the sixth biggest market research company in the world.

Mr Cowling, who will become executive chairman of the enlarged group, said Sofres complemented Taylor Nelson as both companies specialised in measuring TV audiences but in different countries. In the UK and France, Taylor Nelson's forte is in healthcare research, while Sofres has strengths in motor industry research.

Taylor Nelson is to raise pounds 59m through a four-for-nine rights issue, which will offer more than 100 million new shares at 60p each, an underlying 12 per cent discount to the market price. Fimalac Communication, the French quoted company which controls Sofres, will take an 11 per cent stake in the enlarged company, at a cost of pounds 28m. New credit facilities arranged by Societe Generale will also help finance the merger.

The two companies talked as long as two and a half years ago about the logic of coming together, Mr Cowling said. But the strength of sterling made the deal more appealing in recent months, and serious negotiations began about three months ago.

The deal is Taylor Nelson's second big acquisition in five years. It last launched a rights issue when it bought AGB from Maxwell Communications in 1992. That deal more than doubled the company's size, taking its turnover from pounds 20m to pounds 50m.

City analysts said that although the size of yesterday's deal could have raised alarm bells, in this case it looked attractive. Paul Richards, media analyst at Panmure Gordon, said: "Financially the deal stacks up very well. Institutions won't be at all upset there's a rights issue."

Taylor Nelson's shares closed up 1.5p at 73.5p.