HITS Daily Double
"Is it the best outcome for both of us? I don't think so, but you know, life is never ideal."
—-Rob van den Bergh, VNU Chief Executive


Anybody Wanna Buy Billboard? Consortium Including Thomas H. Lee Reaches Agreement With Dutch Owner
Anybody wanna buy a slightly used music trade magazine?

The Dutch management and supervisory boards of VNU NV, owner of Billboard, Soundscan and A.C. Nielsen ratings system, among other properties, had reportedly accepted a 7.5 billion euros ($8.9 billion) buyout offer from a group of private investors, though the company's feisty shareholders still have the final world.

The deal values VNU at 28.75 euros ($34.26) per share and is conditional on 95% shareholder acceptance, though there was an immediate feeling the offer is inadequate.

Back in November, a group of the company's mostly American institutional shareholders blocked a $6.8 billion (5.7 billion euros) bid to buy IMS Health Inc. — unusual in the Netherlands, where shareholders are generally fairly passive.

But Wednesday's offer "substantially undervalues the company," said Knight Vinke Asset Management, holders of 2% of the total shares, which proposed that the company be broken up, restructured and sold.

Fidelity Asset Management, which holds 15% of VNU, is also "unlikely to support the bid," said spokesman Richard Miles.

Among VNU's holdings are Billboard and Hollywood Reporter. It said its boards had unanimously supported the takeover offer from AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co. and Thomas H. Lee Partners, the latter principals in Edgar Bronfman's acquisition of the Warner Music Group.

It also reported full-year net profit rose to 256 million euros ($305 million) from 250 million euros, as sales rose 4% to 3.46 billion euros ($4.12 billion).

The company's chief executive, Rob van den Bergh, vowed to resign after the IMS deal fell apart. He said Wednesday he now expected to leave once the buyout has been completed.

"Is it the best outcome for both of us? I don't think so, but you know, life is never ideal," Van den Bergh said at a news conference.

"I thought long about [the IMS deal] and I thought it was the best for the company, I convinced my board about it, but it didn't get a green light. This outcome is very defendable, and we will do so. And again, the shareholders have the last word."

VNU shares rose by more than 2% after the deal was announced before falling on news of the shareholder opposition. They closed slightly down at 27.35 euros.

Chief Financial Officer Rob Ruijter said that breaking up VNU and selling off the parts as proposed by Knight Vinke was a "high-risk" proposition that would likely end up yielding less than the current deal.

But Knight Vinke repeated Wednesday it believed that VNU's best option would be to sell its AC Nielsen and Nielsen Media Research arms, and radically restructure the remaining marketing information operations.

It demanded that Knight Vinke founder Eric Knight be appointed to VNU's supervisory board, an unprecedented move in Dutch business history.

CFO Ruijter said the current offer appraises VNU's businesses at a premium to those of similar companies, is higher than VNU's historical market value and has significant tax benefits.

The offer is a 23% premium to VNU's share price in July 2005, before the attempt to buy IMS Health.

Ruijter said he expected the deal to close by late May, adding that it was "best for all stakeholders."