TNS rejects £996m second offer from WPP

LONDON - Taylor Nelson Sofres has rejected a fresh takeover bid by Sir Martin Sorrell's WPP group, which had valued the market research group at just under £1bn.

The TNS board said it had unanimously rejected WPP's improved offer last night, arguing that it "substantially undervalues" the company.

WPP had approached TNS with a revised cash-and-stock bid worth 241.5p per TNS share.

The offer, valued at around £996m, marked a five per cent premium on WPP's first rejected offer of £948m, made on May 5. It is also more than a 40% premium on the group's share price from the end of April, before news emerged of the group's merger talks with GfK.

Donald Brydon, TNS chairman, said: "The board met and had no hesitation in rejecting this revised proposal [from WPP] which substantially undervalues the company, even on a standalone basis [without a merger with Gfk]."

The company said it remained committed to pursuing a tie-up with German market research group GfK, and said "significant progress" had already been made.

A TNS spokesman said: "The board of TNS believes that a combination of TNS and GfK would deliver significant value to TNS's shareholders."

WPP founder Sir Martin Sorrell said he was "disappointed" that the TNS board had shown "continued resistance" to his proposals.

He said: "We are again disappointed that our latest attempt to engage with TNS management on a friendly basis in order to deliver an attractive proposal for TNS shareholders has met with continued resistance."

Sorrell claimed TNS had refused to give WPP "the same information which it has given to GfK" in its discussions about a nil-premium merger.

The bringing together of GfK and TNS would create a market research giant with revenues of more than $3.5bn (£1.8bn), based on the 2007 revenues of the two constituent parts, and would be a stronger rival to market leader Nielsen.

TNS is currently the world's third-largest market research firm, with GfK in fifth place.

WPP owns Kantar, the fourth-largest market research group in the world, which had 2007 revenues of $1.89bn.

Shares in TNS rose 1.2% in early trading this morning, up 3p on yesterday's closing price, to 249p at 8.30am.

That price represents a 47.5% boost on the company's 168.75p share price before the GfK and WPP proposals were made public.

Meanwhile, WPP fell 0.8% by 8.30am, down 4p to 635.5p.