VNU Expositions' Parent Considers Takeover Offer by Consortium
Staff -- Tradeshow Week, 1/30/2006
Instead of competing against each other, a group of private-equity firms has come together to make an $8.8 billion bid for the parent of VNU Expositions.
Management at the Netherlands-based VNU is mulling the offer of •28 to •28.5 ($33.90 to $34.50) per share, which offers virtually no premium over the company's recent trading price. The consortium is comprised of AlpInvest Partners, the Blackstone Group, the Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts, Permira and Thomas H. Lee Partners.
The firms made the bid after several weeks of discussions. VNU said it would keep talks with the consortium going as it "continues to weigh alternatives, and fully and fairly evaluate what course of action will serve the best interests of VNU's stakeholders." Company officials also said they're not currently negotiating with any other potential buyers.
VNU in mid-December acknowledged having received a takeover bid in the wake of a shareholder revolt over VNU's own planned $6.8 billion purchase of U.S.-based IMS Health. The revolt forced the company to terminate that merger and resulted in the planned resignation of CEO Rob van den Bergh.
Meanwhile, independent of the takeover bid, VNU is embarking on a cost-cutting plan, in part to enable it to return $1.2 billion to shareholders. Details of the cuts are to be revealed when VNU reports its year-end results March 8.
"It's crystal clear that we still have significant opportunities to dramatically improve our cost structure," CFO Rob Ruijter told analysts during the company's trading update last month, singling out global information technology, finance and corporate expenses as possible targets.
VNU's media measurement and information group should produce 11-percent revenue growth in 2005, twice the 5-percent growth forecast for the marketing information unit. However, the business information group, which includes VNU Expositions and trade magazines such as the Hollywood Reporter, is expected to register only 2-percent growth.
The lackluster growth was blamed on weak conditions in Europe. However, executives praised the tradeshow group for its strong performance.
"We continue to make significant progress with our highly profitable tradeshows. Our growth in tradeshows is helping VNU grow," said van den Bergh, adding that "We introduced 10 new shows in the year and held our first tradeshow in China."
