VNU makes move on diligence

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VNU will allow potential private equity bidders limited access to its books, it is understood, on condition that they indicate by the end of January whether or not they are likely to bid for the Dutch media research group.

The move is the first sign that VNU might agree to sell itself rather than attempt
to rebuild its management and strategy after shareholders blocked its attempted $7bn bid for IMS Health, a US healthcare information business. Several private equity groups have been eyeing VNU since signs of shareholder unrest over the planned bid surfaced
last autumn.

It is thought that a group including Apax Partners, Blackstone, Carlyle, KKR, Permira and Alpinvest is most advanced in its examination of VNU, although the consortium is not fixed, and no firm bid is expected imminently.

Another group, including Thomas H Lee Partners, Bain Capital and others, is also considering an offer. One person familiar with the negotiations said VNU’s decision to open its books could “level the playing field” between the competing bidders. The person added that the end-of-January deadline was not “etched in stone”. “There is a lot of work to do,” the person said.

Two shareholders, Fidelity and Templeton, could prove decisive in determining whether VNU is sold, and at what price. VNU’s shares have risen from a low of €21.06 last year to €27.88 yesterday, giving it a market value of about €7.2bn ($8.7bn). It also has debts of about €2bn.

The private equity approaches have come as the company is seeking replacements for its chief executive, Rob van den Bergh, who announced his resignation when VNU scrapped the IMS deal, and its chairman, Aad Jacobs, who is due to retire in April. The company is in discussions with headhunters, but could find it difficult to attract new management were the uncertainty over its future to drag on.

VNU bonds weakened on Thursday, and in the credit derivatives market the cost of buying protection against a VNU default jumped about 20 per cent to 220 basis points. This means it would cost €220,000 a year to insure €10m of VNU’s bonds against default for five years.

Additional reporting by Ivar Simensen

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