WPP launches TNS bid

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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Advertising giant WPP has formally launched its hostile billion pounds bid for market research firm Taylor Nelson Sofres.

For each Taylor Nelson (TNS) share, WPP is offering 173p in cash plus 0.1889 of a WPP share.

Based on last night’s closing price of 464p per WPP share, the offer values each TNS share at 260.6p and the entire issued share capital of TNS at £1,082m.

The terms represent a 52% premium over the closing price of TNS on 28 April, the day before TNS announced its proposed merger with German firm GfK and a 21% premium over the closing price of TNS on 2 May, the day before WPP made its first merger proposal to TNS.

The offer will include a mix and match facility that will allow accepting TNS shareholders to vary the proportion of cash and shares they receive, subject to offsetting amounts being chosen by other shareholders.

WPP intends to combine TNS with its Kantar unit to form the second largest information, insight and consultancy group in the world.

The combined group would offer the opportunity to generate improvements in margins through the elimination of duplicated activities and infrastructure. WPP expects these improvements to generate pre-tax cost synergies of at least £52m per annum by 2011.

WPP projects that the acquisition would be earnings neutral by the second full year of ownership and earnings enhancing thereafter.

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