UPDATED with stock movement, additional details. Stock in TV ratings giant Nielsen has jumped 20% on news the company will be acquired for $16 billion by a private equity consortium led by Evergreen Coast Capital and Brookfield Business Partners.
The Nielsen Board of Directors 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 prior stock price. Reports had surfaced earlier this year that the parties were proceeding with a deal at a lower price point.
Shares in Nielsen headed toward the middle of the trading day at $26.70, their highest level in nearly a year, on more than eight times their normal trading volume.
The proposed transaction comes with a 45-day “go-shop” period. Nielsen and its advisors, J.P. Morgan and Allen & Co., along with legal counsel, can solicit and consider potential alternative acquisitions. (Deadline readers may recall a “go-shop” clause being part of STX Entertainment’s recent acquisition by The Najafi Companies. During that window, Lionsgate entered into talks with STX even though the $173 million Najafi deal was in place, though it eventually bowed out.)
If Nielsen terminates the deal with the consortium to in favor of a better deal, the scenario would result in a $102 million termination fee payable by Nielsen.
The transaction comes on the eve of TV networks and digital platforms’ upfront ad sales season, when advertising buys are made for the forthcoming year. Nielsen has been in the crosshairs of both ad sellers and buyers in recent years, conceding to undercounting both linear TV viewing and streaming in 2020 and 2021. It lost its accreditation from the Media Rating Council last year, amid public criticism from a number of major media companies. Rivals like iSpot and Samba TV have mounted a major offensive recently and gained some turf, but they have not supplanted Nielsen as the dominant measurement firm.
Sean Cunningham, CEO of the Video Advertising Bureau and a vocal critic of the company, said in a statement that the needs for “any version of Nielsen” remain the same, regardless of who owns the company. He described them as “deep disclosures and real transparency, commitment to the modernization that sharply increased competition demands, and increased collaboration rather than collision with their clients and customers; we are rooting hard for these overdue outcomes from any version of Nielsen.”
The company’s board said it accepted the consortium’s offer following a comprehensive review of the proposal, with the assistance of independent financial and legal advisors.
“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 James A. Attwood, who chairs the board.
On behalf of Evergreen and owner Elliott Investment Management, Managing Partner Jesse Cohn and Senior Portfolio Manager Marc Steinberg said: “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.”
The transaction is still subject to approval by Nielsen’s shareholders.
Nielsen was founded almost 100 years ago by Arthur C. Nielsen Senior and has since grown into the major TV ratings player, acquiring and merging with a range of companies along the way.
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