August 27, 2008 / 6:36 AM / 11 years ago

TNS rejects WPP offer again after GfK drops bid

LONDON (Reuters) - British market research group Taylor Nelson Sofres TNS.L said it continued to recommend rejecting a hostile takeover bid from WPP (WPP.L) despite preferred suitor GfK’s giving up its takeover attempt.

“The WPP offer values each TNS share at 268.7 pence. This price undervalues TNS,” it said in a statement after German peer GfK announced on Wednesday it would no longer pursue its offer.

TNS shares, which have leapt 57 percent since it first said at the end of April it was in talks with GfK, closed at 268.75 pence on Tuesday.

WPP’s cash-and-shares bid values TNS at 1.1 billion-pounds ($2 billion). A combination of TNS and WPP’s Kantar would create the world’s second-biggest market research company.

For the first half of the year, TNS reported underlying revenue growth of 5.1 percent to 567 million pounds and said its order book gave it confidence in its full-year target to increase underlying sales by about 6 percent.

Adjusted operating profit, excluding restructuring costs and amortization of acquired intangible assets, grew 19.6 percent to 54.3 million pounds in the period.

TNS increased its interim dividend by 25 percent to 2 pence per share.

“Our order book is in excellent shape to reach full-year underlying revenue growth of around 6 percent. In the medium term, we work towards our adjusted operating margin objective of over 12.5 percent,” Chief Executive David Lowden said.

TNS trades at 14.4 times expected 2009 earnings, a substantial premium to the European advertising sector average of 10.9, according to Reuters Estimates.

Reporting by Georgina Prodhan, editing by Will Waterman

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