German rival GfK says it will trump the £1.08bn offer from advertising giant WPP
WPP yesterday launched a £1.08bn hostile bid for market research firm TNS, dismissing competing takeover plans from rival GfK as “flaky”.
In a day of drama in the City, TNS and GfK withdrew their proposal for a friendly tie up after Sir Martin Sorrell announced he was taking his bid hostile.
GfK reacted angrily, retorting that it would make “a better offer than WPP”. The German firm said it was pursuing an “alternative all-cash offer” and that it had “identified a potential source of equity,” although it warned that negotiations with backers were at an early stage.
But a spokesperson for WPP last night trashed the counter-offer. “The wording of GfK’s statement is completely flaky. If we were to put out an announcement like that, we’d be crucified.
“There’s no way a commercial lender or a private equity house would put up that kind of cash, not for the return they’d get. There’s some speculation they might be funded by a family,” the spokesperson told City A.M
But he also dismissed the possibility of WPP making a significantly higher offer. “There’s very little wriggle room and we’re going to be very disciplined,” he said.
Investment bank Collins Stewart downgraded its recommendation for WPP from buy to hold on the back of the developments. “The earnings accretion WPP looked set to enjoy from a successful TNS deal looks likely to slip away,” said Collins Stewart analyst Gareth Thomas.