GfK is attempting to find a partner to finance an acquisition of TNS, after a competing £1.08bn hostile bid by marketing services giant WPP forced the two research firms to cancel their planned nil-premium merger last week.
The Daily Telegraph has reported that GfK has been in talks with Cinven and at least one other buyout group. It needs between £400m and £600m from a joint venture partner in order to come up with a better offer than WPP.
However, political considerations in Germany mean that GfK would prefer to team up with a German partner with long investment horizon rather than a short-term focused private equity firm.
Last week, it emerged that GfK was in talks with one such investor, Gunter Herz -- a billionaire who made his money from the Tchibo coffee chain.
GfK's 57% shareholder, the GfK-Verein charitable trust, is reported to want to attach restrictions if GfK teams up with a private equity partner. Its conditions are that the investment must be directly in TNS rather than a bid vehicle that would control both companies, and that the partner would not have a board seat.
Since WPP made its 260.6p per share bid for TNS on July 9, TNS's shares have remained around 270p. This morning they are trading at 269p.
WPP's share price has dropped from 464p the day before it made its bid to 433p this morning. This affects the amount it is offering TNS shareholders as its offer consists of 173p in cash and 0.1889 of a new WPP share for each TNS share.
Based on today's WPP share price the bid is worth 254.8p per TNS share, valuing the company's share capital at £1.06bn.
TNS's board rejected WPP's bid on the same day it was made and favours an acquisition by GfK.
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