But Why, Investors Must Ask

Nelsen Holdings LLC rejected an offer from a group of hedge funds and other investors, including an existing shareholder Elliott Management on March 21. WindAcre Partnership LLC, another investor in Nielsen, said it would be opposed to the takeover and said the intrinsic value of the company was higher than the $25.40/share bid, although it did not submit its own offer and the stock has fallen to $23.23, 8.5% below the offer, implying investors think a higher bid is unlikely.

WindAcre did notify the board that if they accepted the takeover offer, it was willing to acquire enough ownership in Nielsen to reject the takeover bid. This implies that WindAcre could provide billions in capital to take a controlling position in Nielsen, although at what price remains unclear.

It also signals that WindAcre is willing to play the dangerous game of chicken—if another investor doesn’t come up with a higher bid, WindAcre could be left holding the proverbial (empty) bag. I have written a number of stories about Nielsen which previously had a monopoly on TV ratings data. However, the major media companies have recently been turning towards competitors like ComScore, which have been providing real-time data based on set-top box usage.

Although it is clear that the major ad agencies want to remain with the status quo because Nielsen has been the media metric of choice for decades, this may give Comscore and other competitors the sales advantage they need to move in on Nielsen.