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Nielsen's parent a takeover target

Nielsen Media Research's future is cause for speculation as private investors try to buy Dutch company VNU NV.

By JAMES THORNER
Published January 18, 2006

OLDSMAR - Nielsen Media Research, the TV ratings company that employs about 2,000 in Pinellas County, could be restructured and sold if a takeover attempt of its Dutch parent company succeeds, according to some close observers of the company.

What that means for operations at Nielsen's $100-million, 615,000-square-foot campus remains an open question. Nielsen is among the Tampa Bay area's largest private employers.

Word broke Monday that a consortium of private investors is trying to buy VNU NV, the Dutch publishing and media research giant that bought Nielsen for $2.7-billion in 1999.

The most likely result of a VNU sale would be the breakup of the company, said Hans Slob, an analyst in Amsterdam who tracks VNU.

If VNU's subsidiaries are shopped around to other media companies, Nielsen could be restructured and resold, or listed on the stock market as a separate company, Slob said.

Nielsen traded on the New York Stock Exchange until bought by VNU.

Jack Loftus, Nielsen's vice president of communications, said talk of a corporate breakup is speculative.

In any case, Loftus suggested the Oldsmar complex is such an enormous investment it should be buffered from any serious restructuring.

"Our business right now, and as we can see it in the future, is to provide television audience measurement services. Obviously our facility outside of Tampa is at the core of our ability to do that," Loftus said.

Nielsen makes money from networks, TV station owners and cable companies that buy its ratings. The ratings, compiled mostly from electronic meters hooked to thousands of TVs, are key to setting advertising rates. Audience information is guarded in a 25,000-square-foot data center in Oldsmar.

Last year, VNU became ripe for a takeover when its planned $7-billion acquisition of U.S. health care data firm IMS Health sparked a stockholder revolt. Chief executive Rob van den Bergh resigned.

VNU has rejected takeover offers in the past. The latest offer comes from a group of seven private equity firms: AlpInvest Partners, Blackstone Group, Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts, Permira and Thomas H. Lee Partners.

The group's takeover offer totals about $8.9-billion.

According to media reports, that offer is low enough to inaugurate a bidding war for VNU.

Nielsen represents a big and profitable chunk of VNU. The company's "media and measurement group," over which Nielsen reigns supreme, accounts for about a quarter of the company's $4-billion in revenue.

With Nielsen's ownership up in the air, at least one competitor senses an opportunity.

Frank Maggio, chairman of Bradenton research agency ErinMedia, has sued Nielsen twice to stop what he calls false advertising of Nielsen's research methods.

"If one of the rumored consortiums of U.S. investment companies is indeed able to acquire control of VNU's assets, I am prepared to line up the financing to acquire and change Nielsen," Maggio said last week without offering specifics.

Nielsen wouldn't come cheap, however. A buyer might have to raise more than $3-billion to pry the company from VNU's other holdings. And being the biggest name in TV ratings the past 50 years, Nielsen would likely have other suitors.

Information from Times wires was used in this story. James Thorner can be reached at thorner@sptimes.com or 813 226-3313.

[Last modified January 18, 2006, 01:10:21]