In a deal valued at $16 billion, Nielsen has agreed to sell itself to a consortium of private equity firms led by Evergreen Coast Capital Corporation -- an affiliate of Elliott Investment Management -- and Brookfield Business Partners. The $28-per share offer includes the assumption of debt. The Nielsen board voted unanimously to support the acquisition proposal, which represents a 10% premium over the consortium's previous proposal and a 60% premium over Nielsen's stock price before the sale potential surfaced in early-March.
"After a thorough assessment, the Board determined that this transaction represents an attractive outcome for our shareholders by providing a cash takeout at a substantial premium, while supporting Nielsen's commitment to our clients, employees and stakeholders.," said Nielsen Chair James A. Attwood. “The consortium sees the full potential of Nielsen's leadership position in the media industry and the unique value we deliver for our clients worldwide.”|
Nielsen shares soared 22% in pre-market trading following the announcement of the sale.
Nielsen’s earlier this month rejected what it called an “unsolicited” buyout offer of $9.13 billion cash plus assumption of the company’s roughly $5 billion in debt saying the $25.40 per-share offer “significantly undervalued” the ratings company and wouldn’t adequately compensate shareholders for what it said are Nielsen's growth prospects. In rejecting the earlier offer, Nielsen said based on feedback from the WindAcre Partnership, one of the company’s largest shareholders, it determined that the transaction would be “highly unlikely” to receive shareholder approval.
In its statement Tuesday, Nielsen said the board agreed to this offer following a “comprehensive review” of the proposal, with the assistance of its independent financial and legal advisors.
"After months of deep market analysis, industry diligence and management reviews, we are firmly convinced that Nielsen will continue to be the gold standard for audience measurement as it executes on the Nielsen ONE roadmap," said Evergreen and Elliott’s Managing Partner Jesse Cohn and Senior Portfolio Manager Marc Steinberg in a joint statement. "Having first invested in Nielsen nearly four years ago, we have a unique appreciation for the company's ongoing relevance to the global, digital-first media ecosystem. Today's outcome represents a significant win for Nielsen's shareholders and for the business itself, as our multibillion-dollar investment will help Nielsen reinforce its transformation at this critical inflection point. We are pleased to partner with David and the existing management team to lead Nielsen after the transaction is completed."
The private equity consortium has secured fully committed debt and equity financing, including an approximately $5.7 billion equity commitment from the consortium consisting of Evergreen and Brookfield. There are no financing conditions to the closing of the transaction.
“As a private company, Nielsen will be even better positioned to deliver the best measures of consumers' rapidly changing behaviors across all channels and platforms," said Dave Gregory, Managing Partner of Brookfield Business Partners. "We are pleased to invest in this iconic company and help lead the industry into the next generation of audience measurement."
The transaction agreement provides for a 45-day "go-shop" period, during which Nielsen – with the assistance of its financial advisors, J.P. Morgan and Allen & Company, and its legal advisors – will actively solicit, evaluate and potentially enter into negotiations with parties that offer alternative acquisition proposals. The go-shop period expires 45 days after Nielsen's entry into the transaction agreement. A competing bidder who makes a superior proposal would bear a $102 million -- or one percent of equity value -- termination fee that is payable by Nielsen if the ratings company terminates the transaction agreement with the consortium to accept the sweeter deal.
The transaction is also subject to approval by Nielsen shareholders and regulatory approvals. The transaction will also be subject to U.K. court approval pursuant to a scheme of arrangement. If all goes as planned, a second half closing is expected.
In a related announced, Nielsen said it no longer intends to commence share repurchases under the Board's previously approved authorization.