Ad measurement clashes continue as Nielsen rejects bid
By Zion Rufus
Global market research firm Nielsen has announced that its board is determined not to proceed with the ‘unsolicited’ acquisition proposal from a private equity consortium following a comprehensive review of the proposal.
Earlier, the private equity consortium had sought to buy Nielsen for about $15 billion.
The media measurement company which has been under intense scrutiny for months after it revealed to TV networks that it had been undercounting their out-of-home audiences for national TV programming since September 2020, disclosed that the consortium’s proposal of $25.40 per share significantly undervalues the Company and does not adequately compensate shareholders for its growth prospects.
Although Nielsen blamed the error on a software issue, some of the world’s biggest networks, advertisers, and media buying agencies began to seek out alternative channels for their audience measurement solutions and as well develop new means of tracking the reach of advertising amongst linear and digital viewers.
Meanwhile, following feedback from WindAcre, one of Nielsen’s largest shareholders on the Consortium’s proposal, the Board determined that the transaction would be highly unlikely to receive shareholder approval.
However, at the request of the Consortium, Nielsen revealed that it entered into a confidentiality agreement with WindAcre. The confidentiality agreement permitted WindAcre to speak with the Consortium about the possibility of joining the Consortium.
Following these discussions, WindAcre informed Nielsen and the Consortium that it had determined not to join the Consortium and that it would oppose the transaction as it views Nielsen’s intrinsic value to be significantly higher than values proposed by the Consortium.
WindAcre, which initially invested in the Company in 2013, also informed Nielsen that, if Nielsen were to accept the proposal, WindAcre intended to acquire direct ownership of sufficient shares to prevent shareholder approval of the proposed transaction.
James A. Attwood, Chairperson of the Nielsen Board said: “We continue to have strong confidence in the management team and Nielsen’s strategy to create long-term value for shareholders. 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.”
“As Nielsen’s 2021 financial results demonstrate, the Company is achieving strong revenue growth while making significant progress in new product development and MRC accreditation.”
It should be recalled that in 2021, the Video Advertising Bureau (VAB) had formally requested the revocation of Nielsen’s Media Ratings Council accreditation for national TV service due to multiple, major and persistent violations.
However, the Company remains on track to deliver Nielsen ONE – a transformative cross-media solution that will evolve the metrics underpinning the more than $100 billion video advertising ecosystem in 2022.
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