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VNU Urges Shareholders to Accept Bid at Meeting

April 18, 2006

VNU NV, the Dutch media company that's a target of a 7.5 billion-euro ($9.2 billion) bid from buyout firms, urged shareholders to accept the offer at a meeting in Amsterdam.

``What's on the table is really their best option,'' Chief Financial Officer Rob Ruijter said in a telephone interview before the meeting today. ``The offer will not be withdrawn in any shape or form.''

The 28.75 euro-per-share offer ``represents the best alternative for VNU shareholders,'' and reflects a 20 percent premium over the company's two-year average share price, VNU said in an e-mailed statement.

VNU shareholders met in an Amsterdam hotel to discuss the bid before the offer period ends on May 5. The Haarlem, Netherlands-based company said last week it was moving its annual general meeting to June 13, so it could ``devote'' today's meeting solely to the bid by Blackstone Group LP, Kohlberg Kravis Roberts & Co. and other buyout firms.

Knight Vinke Asset Management LLC, which owns less than 2 percent of VNU shares, is urging shareholders to reject the offer, saying it undervalues the company. Fidelity International, which held about 15 percent of VNU shares as of November, said last month it was ``unlikely to support the offer.''

Contingency Plans

At the meeting, Knight Vinke Chairman Eric Knight said it's ``shocking'' that VNU management doesn't seem to have a contingency plan in the event the bid fails. VNU Chief Executive Officer Rob van den Bergh responded by saying the company does have a contingency plan, referring to supervisory board chairman Aad Jacobs. Jacobs then said changes will be made in top management if the bid doesn't succeed.

Knight Vinke is working to ``fine tune'' its alternative plan for VNU, Knight said, adding that he will provide more details on the plan in the ``coming days.''

The bid is subject to several thresholds regarding the percentage of shares tendered.

If 95 percent of shares are tendered, the buyout group can compel minority shareholders to sell their shares, as spelled out in the offer document and under Dutch law. If less than 60 percent of shares are tendered, the buyout group can complete the takeover with VNU's approval, the document says. If 60 percent to 95 percent of shares are tendered, ``it's a prerogative of the private equity group'' whether to proceed with the deal, Ruijter said.

Lower Acceptance Level

``Ninety-five percent is the legal threshold at which you can squeeze out a minority,'' Ruijter said in the interview. ``But there's always the option as we have in our document that any consortium can have a lower level, and we have 60 percent.'' The offer document doesn't require VNU's approval if the buyout group decides to go ahead with the deal based on tender offers of between 60 percent and 95 percent.

Given the publicly stated opposition of some shareholders, it will be ``difficult'' for the bid to reach the 95 percent acceptance level, analyst Polo Tang of investment bank UBS AG said in a research note today. ``Therefore, the most realistic outcome in our view is that either VNU remains listed, but with private equity controlling more than 60 percent of the equity, or that private equity walk away.''


Some critics of the offer, including Fidelity, ``choose their words carefully,'' Ruijter said in the interview. ``Before they have to tender, shareholders will always moan about any proposed offer because they always want to see more money on the table.''

Knight Vinke, Fidelity and other investors last year led a shareholder revolt that prompted VNU to abandon a $6.3 billion purchase of Fairfield, Connecticut-based IMS Health Inc.

The bidders for VNU, the world's largest market research company, also include Amsterdam-based AlpInvest Partners NV, Washington-based Carlyle Group, San Francisco-based Hellman & Friedman LLC and Boston-based Thomas H. Lee Partners LP. VNU's board said March 8 it backed the offer.

Shares of VNU gained 13 cents, or 0.5 percent, to 27.44 euros in Amsterdam.

To contact the reporter on this story: Charles Goldsmith in London at

To contact the editor responsible for this story: Zimri Smith at

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