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The private equity consortium battling resistance to its bid for VNU on Thursday increased its offer for the Dutch business information company by €0.75 a share in an 11th-hour effort to win shareholder backing.
It also increased its offer for preference shares by €8 to €21, lowered the acceptance threshold from 95 per cent to 80 per cent for the offer to be declared unconditional, and extended the tender period by two weeks.
VNU shares rose by almost 5 per cent on the news in early trading on Friday.
The move won immediate approval from Templeton, which has a 14.7 per cent stake in VNU. Fidelity, which controls 15 per cent and had indicated it was “unlikely” to support the original offer, did not comment on Thursday night.The increased offer came on the eve of the scheduled close of the tender period for an offer launched on March 31 at €28.75 a share, valuing VNU at about €7.7bn ($9.7bn) or €8.7bn including net debt.
It means the consortium is willing to inject an additional €194.2m if all ordinary and preference shares are tendered. The offer will now run to May 19.
Uppermost in investors’ minds is likely to be the question of why the consortium, which has maintained throughout that its bid was fairly priced and as much as it was willing to pay, has found the capacity now to offer more.
Even the indicative price level of €28.50 tabled in January had proved too steep for two private equity companies that had been part of the original consortium.
VNU’s management and supervisory boards had unanimously backed the offer, pointing out that it was the best – indeed the only bid – for the company. A person close to the consortium said: “This is the endgame. This is as high as they are prepared to go, but they were prepared to do whatever it took to get this deal done.” The consortium believes that based on its soundings of the market, the improved offer would secure sufficient investor support.
Knight Vinke, the fund manager with 1.2 per cent of VNU that has co-ordinated opposition to the bid, said the revised offer “changed nothing”.
“We still believe it fundamentally undervalues VNU,” Knight Vinke said, pointing out that it believed the company could eventually be worth €35-€40 a share after restructuring.
The shares fell back slightly to €29.02 after reaching €29.14 in morning trade.