GfK says drops plans for TNS bid on financing

FRANKFURT (Reuters) - Germany's GfK Holdings AG (GFKG.DE) said on Wednesday it will not bid for British market research group Taylor Nelson Sofres Plc TNS.L, citing financing reasons.

This leaves only WPP Group Plc (WPP.L), the world's No. 2 advertising and marketing firm, in the race. It has offered $2.2 billion in cash and shares in a hostile bid for TNS.

TNS has said it would prefer to link up with GfK.

"The terms of the financing available did not enable a sufficiently compelling alternative cash offer to be made for TNS," GfK said.

GfK shares were indicated nearly 6 percent higher in premarket data at 0630 GMT.

Germany's manager magazin reported on Tuesday that GfK dropped its planned bid because Apax APAX.UL, the private equity fund it lined up to help finance a deal, was demanding wide-ranging control rights. A GfK spokesman said the report was speculation.

GfK Chief Executive Klaus Wuebbenhorst said earlier this month the company had been holding talks with partners about a possible offer for TNS and these were "positive."

(Reporting by Peter Dinkloh; Editing by Erica Billingham)