Nielsen Holdings PLC has turned down a bid by a private-equity consortium to buy the media-measurement giant, noting that the company feels the proposal “does not adequately compensate shareholders for Nielsen’s growth prospects.”
Shares in the company, which has been under scrutiny for months as TV networks that represent some of its biggest clients have sought new measurement work from rivals, soared more than 40% on Monday on a report that a group that included Nielsen investor Elliott Management Corp. sought to buy the company for what could be around $15 billion, including debt.
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Nielsen said its choice was bolstered by conversations with one of its largest shareholders, The WindAcre Partnership, an investor since 2013. WindAcre declined to join the private-equity consortium and said it would move to block an acquisition if Nielsen chose to accept the bid. WindAcre, which has also been a significant investor in Amazon and Google, “views Nielsen’s intrinsic value to be significantly higher than values proposed by the consortium,” Nielsen said in a statement. WindAcre “has economic exposure” to around 14.4% of Nielsen’s shares, in addition to a 9.6% stake in the company.
“We continue to have strong confidence in the management team and Nielsen’s strategy to create long-term value for shareholders,” said James A. Attwood, chair of Nielsen’s board of directors, in a statement. “We are always open to exploring any avenue to create value for shareholders, but the Board is in agreement with WindAcre, one of our largest shareholders, that the Consortium’s proposal significantly undervalues the Company. Further reflecting our confidence in the Company, we plan to commence share repurchases, which we expect to be an important element of our ongoing balanced capital allocation strategy.”
Even so, Nielsen has been under a microscope for months. TV networks and their owners have grown disenchanted with Nielsen’s ability to count viewers who may watch their favorite programs via digital means, on mobile screens on through streaming video. Nielsen has lost industry accreditation for its national TV ratings service, and is working on a new measurement methodology that would tabulate unduplicated cross-stream viewership, but it will not be rolled out in full for several months. Meanwhile, many of the media companies, including NBCUniversal, WarnerMedia and others have struck pacts with new measurement vendors to create so-called “alternate currencies” in time for the industry’s next “upfront” ad-sales market.
Nielsen has confidence its current efforts to win back accreditation are on track, along with a retooling of its audience-measurement technology it believes will come online this year. Nielsen has already struck a testing alliance with entities such as Walt Disney Co. and Interpublic Group, and has begun to make available new data analyzing unduplicated audiences who watch their favorite programming across linear and digital venues. The challenge to that effort comes from the networks who have begun to create their own audience-measurement efforts using rivals such as iSpot, ComScore and VideoAmp, in hopes that advertisers will start moving some portion of their media buys to be graded by their alternatives.
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