Nielsen To Raise Billions As NLSN: Investors, Managers Will Reap Big Returns

In a preliminary prospectus for a multibillion dollar public stock offering filed with the Securities & Exchange Commission Monday, Nielsen Co. opens with a colorful graphic showing a diverse array of consumer faces, and the tagline: "Nielsen helps clients see consumers clearly." In considerably less colorful, terse SEC-filing speak, the prospectus goes on to explain how Nielsen's investors, underwriters and top managers will be seeing some pretty clear returns on their investment in the company. The filing says Nielsen plans to raise $2.01 billion via an initial public offering of common stock, more than the $1.75 billion it had originally been seeking, and that most of the proceeds would be used to pay off the private equity firms that took it private in 2006, as well as a tidy $103 million sponsors "fee," and millions of dollars in stock grants and options to its senior management team. Not mentioned is how the offering, or the proceeds generated by it, will help its clients see any more clearly.



The biggest financial windfall will go to the financial industry, including big underwriting banks like J.P. Morgan and Morgan Stanley. The filing estimates that the net proceeds of the offering, after the underwriters take their cut, will be $1.66 billion, the balance of which will be used to pay off various notes held by creditors including the private equity firms that took Nielsen private in 2006.

The filing says those private equity firms "sill continue to have significant influence over" Nielsen after the offering, and could limit the ability of other public shareholders to influence the direction of the company.

The biggest individual beneficiaries of the offering will be Nielsen's senior managers, especially CEO David Calhoun, whom will receive a multimillion windfall, mostly from shares of stock, as well as deferred compensation. Other top Nielsen executives reaping windfalls from deferred compensation and stock option grants include Vice Chairman Susan Whiting, CFO Brian West, Mitchell Habib, and Roberto Llamas.

The filing also discloses how handsomely Nielsen managers are paid. CEO Calhoun earned $6,326,221 in 2009 compensation. Executive Vice President Habib earned $3,050,736. Whiting earned $1,990,575. And West earned $1,850,973.

Of course, there are no long-term guarantees for Nielsen's investors, for all the "opportunities" the filing cites in terms of the rapidly changing consumer media and purchasing landscape, it also cites some "key risks," including:

* We may be unable to adapt to significant technological change which could adversely affect our business.
* Consolidation in the consumer packaged goods, media, entertainment, telecommunications and technology industries could put pressure on the pricing of our products and services, thereby leading to decreased earnings.
* Continued adverse market conditions, particularly in the consumer packaged goods, media, entertainment, telecommunications or technology industries in particular, could adversely impact our revenue.
* Our substantial indebtedness could adversely affect our financial health and we and our subsidiaries may still be able to incur substantially more debt, which could further increase the risk associated with our substantial leverage.

Upon completion, Nielsen's public shares will trade under the stock symbol NLSN.

2 comments about "Nielsen To Raise Billions As NLSN: Investors, Managers Will Reap Big Returns".
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  1. Andrew Crowley from ggiyt, August 17, 2010 at 9:55 a.m.

    God knows they need the money. they're over 2 billion in debt.

  2. Mike Einstein from the Brothers Einstein, August 17, 2010 at 2:07 p.m.

    A fool and his money are soon parted.

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