Nielsen Unveils New Capital Plan: Boosts Cash Dividend, Sets Stock Buyback To Avert Dilution Following Recent Offering

On Madison Avenue, Nielsen is known for making media audience estimates and other forms of consumer research. On Wall Street, it is known for making money -- for its investors. The media and marketing research giant this morning announced a new “capital allocation” program that will use its profits and strong cash position to make its stockholders even richer, especially the big private-equity companies that bankrolled its initial public offering.

The new capital plan includes a 25% increase in the quarterly cash dividend Nielsen plans to pay its shareholders on Sept. 11, as well as a plan to “repurchase” $500 million of common stock.

Nielsen said the stock buyback plan is being implemented to “mitigate dilution” related to its equity compensation plans -- which is ironic, given that Nielsen recently completed a secondary offering of 40.3 million shares of new common stock that raised more than a billion dollars for its “sponsor” shareholders, who continue to hold 41% of Nielsen’s shares.

While Nielsen announced only low single-digit revenue growth for its second-quarter earnings, the company is in a strong cash position following the recent sales of its conferences and exhibitions business.

Nielsen has scheduled a conference call to discuss its earnings and its new capital plan, and to update investors on its planned acquisition of Arbitron, which is still undergoing regulatory approval.
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