Nielsen Holdings PLC declined a private equity consortium’s offer to purchase the media-measurement company. The company felt the proposal was too risky. “does not adequately compensate shareholders for Nielsen’s growth prospects.”
On Monday, shares in the company rose more than 40% after it was revealed that an investor group including Nielsen Elliott Management Corp. wanted to purchase the company for around $15 billion.
Nielsen claimed that its decision was supported by discussions with The WindAcre Partnership (a shareholder since 2013), which is one of its largest shareholders. WindAcre said that it wouldn’t join the private equity consortium and would block any acquisition by Nielsen if it did. WindAcre is also a major investor in Amazon. “views Nielsen’s intrinsic value to be significantly higher than values proposed by the consortium,”Nielsen stated this in a statement. WindAcre “has economic exposure” to around 14.4% of Nielsen’s shares, in addition to a 9.6% stake in the company.
“We continue to have strong confidence in the management team and Nielsen’s strategy to create long-term value for shareholders,” said James A. Attwood, chair of Nielsen’s board of directors, in a statement. “We are always open to exploring any avenue to create value for shareholders, but the Board is in agreement with WindAcre, one of our largest shareholders, that the Consortium’s proposal significantly undervalues the Company. Further reflecting our confidence in the Company, we plan to commence share repurchases, which we expect to be an important element of our ongoing balanced capital allocation strategy.”
Nielsen has been under scrutiny for several months. TV networks and their owners have grown disenchanted with Nielsen’s ability to count viewers who may watch their favorite programs via digital means, on mobile screens on through streaming video. Nielsen lost industry accreditation for the national TV ratings service. It is currently working on a new measurement method that would calculate unduplicated crossstream viewership. However, it won’t be fully implemented for several months. Many media companies such as NBCUniversal, WarnerMedia, and others have reached agreements with new measurement vendors to create the so-called “Real Media” (or simply “Media”) “alternate currencies” in time for the industry’s next “upfront” ad-sales market.
Nielsen believes its current efforts to get back accreditation are on the right track. The company also plans to revamp its audience-measurement software, which it believes will go online in 2015. Nielsen has established a testing alliance to entities like Interpublic Group or Walt Disney Co. It has also begun making available new data to analyze unduplicated audiences that watch their favorite programming in both linear and digital formats. Networks have created their own audience-measurement programs using rivals like iSpot and ComScore in the hopes that advertisers will move some of their media buys to their alternatives.