• March 9, 2006

Two of VNU's largest shareholders - Fidelity Investments and Knight Vinke - are fighting VNU's decision to accept a $9 billion buyout offer from a group of private equity firms, adding another chapter to the ongoing saga of the Dutch media research and publishing company.

VNU, which transformed itself in recent years into the world's largest provider of media and marketing research, has been in management turmoil ever since shareholders rejected its deal to acquire IMS Health, a move that destabilized its management structure and opened the company to a potential takeover.

On Wednesday, VNU, the parent of Nielsen Media Research, ACNielsen, and a variety of trade publications, said it accepted the buyout offer as part of a long-term solution. That deal was expected to be completed by the end of May, and the companies indicated none of VNU's assets would be sold for at least 18 months under the new, privately held ownership.

But Fidelity and Knight Vinke apparently believe the deal doesn't provide enough shareholder value and are fighting it, even though it is about $400 million higher than an earlier bid. Knight Vinke has also floated a plan to keep VNU as a publicly traded company, but to begin selling off key assets, including Nielsen Media Research and the trade publications, though it recommends retaining ACNielsen until that troubled division can fetch a higher market value.

The turmoil and uncertainty comes as Nielsen Media Research prepares for its national client meetings in Orlando next week, and is likely to fuel tensions among some clients.

In a letter sent to clients on Wednesday, Nielsen Media Research CEO Susan Whiting sought to assuage concerns, noting that the new investors, "concluded, after an intensive examination of our business, that VNU is a strong company with significant opportunities to serve your growing needs for more and better market intelligence. The investors have told us that they plan to keep VNU substantially together as an integrated company and pursue our existing long-term strategies. Nielsen Media Research will continue to be well funded. Our investors are determined, for example, that Nielsen Media Research has the capital investments necessary to continue our development initiatives and service improvements."

In the meantime, Whiting said Nielsen Media Research would remain committed to its strategy "to follow the video," a reference to Nielsen's new portfolio approach to audience measurement that will utilize a variety of methods for measuring video content on various media platforms.

"Going forward, sweeping changes in the media and entertainment industries, marketing practices, retailing, demographics and technology are creating unprecedented demand for more comprehensive information about audiences, advertising and consumers," she wrote, concluding, "I am confident that a more client-focused relationship among VNU's core businesses will enable us to offer clients a broad array of services."