(Adds details on progress of TNS bid, change in tax domicile)
By Kate Holton
LONDON, Sept 29 (Reuters) - Advertising group WPP (WPP.L) went on the offensive on Monday, announcing plans to move its tax base to Ireland in a rebuff to the British government and saying it has won over yet more investors at bid target TNS TNS.L.
Martin Sorrell’s WPP, the world’s second-biggest advertising and marketing group, has made a 1.2 billion pound ($2.16 billion) hostile bid for the market research group and recently extended its offer until Oct. 3.
WPP said it had now secured assurances from 43 percent of TNS investors, up from 34 percent at the end of last week. Based on Monday’s WPP closing price, the offer values each TNS share at around 256 pence.
The group also took the opportunity to confirm the details of its planned domicile move from Britain to Ireland because of the “complexity” of the current UK tax system.
“The board of WPP believes that the most appropriate structure ... is to introduce a new Jersey incorporated parent company for the WPP Group, that will be tax resident in the Republic of Ireland,” the company said.
The decision to shift the British group’s official headquarters offshore is a blow for the government, particularly as WPP Chief Executive Sorrell has acted as an ambassador for British business.
Earlier this year, drugmaker Shire (SHP.L) and media group United Business Media (UBM.L) also decided to shift their tax domiciles from Britain to Ireland because of planned tax changes on foreign earnings.
If WPP is successful in its bid for TNS, it will also remove TNS from the British tax base.
WPP said the move would not result in any changes in the day-to-day conduct of the business. The new parent company, which will be called WPP Plc, will have its primary listing on the London Stock Exchange and its American Depositary Shares will be traded on NASDAQ.
It will still report in British pounds.
“The new parent company will have the same board and management team as WPP on the date that the scheme becomes effective,” it said.
The move will need to be approved by WPP share owners, with meetings expected to be convened on Oct. 30, it said.
The group said TNS shareholders accepting WPP shares as part of the deal would receive shares in the ultimate parent company. TNS has repeatedly urged its shareholders to reject the offer. (Editing by Steve Orlofsky)