Bloomberg News

VNU Shares Gain After Buyout Group Raises Offer

May 05, 2006

Shares of VNU NV, the Dutch media company that owns market researcher ACNielsen, rose 4.9 percent after a buyout group including Blackstone Group LP and Kohlberg Kravis Roberts & Co. increased its offer to 7.58 billion euros ($9.6 billion).

VNU shares gained 1.36 euros to 29.12 euros in Amsterdam. The buyout group yesterday raised the offer 2.6 percent to 29.50 euros a share from 28.75 euros, valuing the Haarlem, Netherlands-based company at about 8.7 billion euros including debt.

``Chances for a successful bid have increased significantly,'' Gert Potvlieghe, an analyst at Petercam, wrote in a note to investors today. He rates VNU shares ``hold.'' ``The VNU file is a soap story full of surprises.''

The increased bid coupled with the euro's strengthening against the dollar in the past month makes it more likely the bid will succeed, analysts said. Franklin Resources Inc., which has about 14.7 percent of VNU shares, said accepting the sweetened offer ``is in the best interests'' of the company's funds. Knight Vinke Asset Management LLC, which owns less than 2 percent, said it opposes the revised offer.

`Fair Value'

The increased offer ``is a fair value for VNU,'' Rabo Securities analyst Hans Slob said today in a note to clients. The dollar has gained 4.6 percent against the euro since the formal buyout offer on April 3, according to Bloomberg data.

VNU generates 70 percent to 80 percent of its operating revenue in North America, Slob said. ``Taking into account the adverse currency impact, one can therefore argue that the bid price has been raised 6 percent to 7 percent.''

VNU assets include Billboard and the Hollywood Reporter magazines in the U.S., and the Nielsen Media Research television-rating service.

Under the revised offer, the acceptance period was extended to May 19 from May 5, and the threshold for the bid to be made unconditional was lowered to 80 percent from 95 percent. If 80 percent isn't reached, VNU can declare the offer unconditional at an acceptance level of between 60 percent and 80 percent and may do so with VNU's consent if the shares tendered fall short of 60 percent.

The offer price for the company's preferred shares was increased by 8 euros to 21 euros.

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.

Fidelity International, which held about 15 percent of VNU as of November, declined to comment on the revised offer, spokesman Richard Miles said late yesterday. On March 8, he said Fidelity was ``unlikely'' to support the initial offer.

Other firms participating in the buyout offer include Amsterdam-based AlpInvest Partners NV, Washington-based Carlyle Group, San Francisco-based Hellman & Friedman LLC and Boston- based Thomas H. Lee Partners LP.

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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