Taylor Nelson Sofres ruled itself out of buying NFO after it said it would not issue equity to fund an acquisition.
United Business Media and WPP Group have both dropped out of the race, having balked at the price. WPP was prepared to pay between $350m (£218.6m) and $400m, but with a thinning field of buyers the troubled Interpublic Group of Companies' bargaining position is looking increasingly weak.
The only players currently still in the running are believed to be Aegis, owner of media-buying group Carat, and French media firm Ipsos. The bids are thought to range from $450m to $550m but, with competition to buy the market research arm evaporating, the price could fall.
Like many advertising agency groups, Interpublic used bond issues to raise cash. However, some bond issues used by Interpublic have special 'put' options, which give bondholders the option the right to sell the bonds back to the company at a set stock price.
The problem lies in the fact that the bonds were issued back in 2001 when the market was buoyant, with the hope that it would continue to rise. However, as Interpublic's shares have dropped the 'put' options leave it exposed should the bond holders asked to be repaid in cash.
The bond issue of concern was issued in December 2001 and is valued about $586m. To avert more trouble, Interpublic is refinancing with the sale of $600m in convertible senior notes.
Sri Nadesan, director of convertible research at Wachovia Securities, told The Wall Street Journal that by doing this, Interpublic is giving itself more breathing room. "It isn't reducing debt. All it is doing is pushing out the 'put' deadline by five years."
Last week, Interpublic uncovered another $165.7m in charges going back to 1997 and said that profits for the fourth quarter of 2002 had fallen to $20.3m, the result of a collapse of profits at McCann-Erickson WorldGroup.
In a statement, Bell said: "We have major work ahead of us. The company has made strides in improving its balance sheet and liquidity. These will remain significant priorities for me, as will a commitment to achieving financial reliability and accountability, both at the holding company and within our operating units."
The charges come on top of $181.3m already uncovered last year, with $135.8m relating to losses at the troubled Octagon Motor Sports division, which owns the Brands Hatch racing circuit, and the remaining $29.9m at unnamed divisions, stretching back to 1997.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .
.jpg)
.jpg)