Consortium raises bid price for VNU to €8.5bn

The private equity consortium bidding for Dutch media and marketing business VNU has increased its offer from €28.75 to €29.50, a move which has already received a positive response from shareholder Templeton Global Advisors.

Valcon Acquisition, the private equity consortium attempting to take Dutch media group VNU private, has raised its offer price following several weeks of criticism from activist shareholders.

The private equity consortium, comprised of AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts and Thomas H. Lee Partners, has increased its offer price per ordinary share from €28.75 to €29.50. The offer price per preferred share has also increased from €13 to €21.

The group’s new offer values VNU at €8.7 bn ($10.78 billion) including net debt, an increase of €193 million.

In addition, the acceptance level threshold for the offer has been lowered from 95 percent to 80 percent.

Templeton Global Advisors, an affiliate of Franklin Resources, which has a 14.7 percent interest in VNU, said in a release last night that “barring unforeseen circumstances, accepting the revised offer is in the best interests of the funds and separate accounts managed by affiliates of Franklin Resources”.

Templeton Global Advisors had not disclosed its position on the previous offer from Valcon Acquisition. Other shareholders, such as Knight Vinke Asset Management (KVAM), however, have launched a series of press releases in recent weeks criticising the €28.75 offer.

KVAM, which owns less than 2 percent of VNU, had said that new management and a reconstituted board of directors at VNU would be capable of generating “substantially higher profits from its existing core businesses” than Valcon Acquisition’s proposed takeover bid.

KVAM was not immediately available for comment. A spokesman for the firm told Reuters that the offer would be rejected as it still undervalued the company.

The offer period, which was set for today, has now been extended to 19 May 2006.