WPP Group cautious over TNS deal after scrutinising its books

WPP Group has begun to distance itself from a potential deal with Taylor Nelson Sofres, following closer scrutiny of the global research company’s financial condition earlier this week.

One source close to WPP Group chief executive Sir Martin Sorrell says his “ardour for a deal is definitely cooling”.

WPP is engaged in a complex stand-off with German market research company GfK over who will have eventual control of TNS. The board of TNS favours a so-called nil-premium merger with GfK and has rebuffed two cash-and-shares offers for the companyby WPP. WPP owns exten-sive market research interests through its Kantar arm.

Earlier Sorrell had said: “There’s a 30% probability we walk; a 30% cent probability we stay; a 30% probability we might go up; and a 10% chance we go hostile.”

“The first probability, of walking away, has gone up since Sorrell had a closer look at the TNS books,” adds the source.

Last Monday, as a result of pressure from the Takeover Panel, TNS was obliged to give WPP a fuller picture of its operations. It is not known precisely what conclusions the WPP team reached, although Sorrell is believed to have previously expressed concern over the profitability of TNS’ North American operations.

“We’ll judge Sorrell as much on his actions as his words. We’re 100% confident the merger with GfK is a good deal,” says a TNS spokesman.

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