Nielsen Holdings' stock climbed more than 40% Monday in response to a Wall Street Journal report that a consortium of private investors, including activist investor Elliott Management, is in advanced talks to buy the media measurement company for about $15 billion. Sources confirmed those talks to Axios.
Why it matters: Nielsen is under extraordinary pressure to modernize its media measurement capabilities as dozens of new firms launch to take its market share. Investors question if it can compete without a strategic overhaul.
Be smart: A private buyout would help Nielsen continue to transition from linear to digital media measurement without the hot spotlight of the private markets. Plus, Elliott may feel it's out of options.
- It's been involved with Nielsen for around four years, during which time there's been a CEO change, board changes, share repurchases and a strategic spinoff. None of which moved the stock nearly as much as the WSJ's report of a possible sale.
- Nielsen sold its retail measurement arm for $2.7 billion last year, following pressure from Elliot to alleviate debt.
- Sources say that Elliott has been working on this deal for some time, and has most of the $10 billion-plus of financing lined up.
- "As a matter of company policy, Nielsen does not comment on market rumors or speculation," the company said in a statement. Elliott also declined comment.
Catch up quick: Nielsen has been the ultimate authority in television ratings for decades, but it's come under fire over the past year for multiple measurement errors.
- In December, Nielsen admitted it had been undercounting its out-of-home audience over the previous 16 months.
- While Nielsen said the undercounts had "no impact or minimal impact" the Video Advertising Bureau — a vocal critic of Nielsen — argued it cost TV networks as much as $700 million in lost ad time.
- The Media Rating Council found that Nielsen had been undercounting the key demographic of adults aged 18-49 in February of 2021. The MRC eventually suspended Nielsen's accreditation.
The big picture: Elliott Management has a strong track record for getting what it wants from companies it pressures.
- AT&T agreed to major changes, and eventually the spin-offs of all of its media properties, following activist pressure from Elliott.
- Twitter CEO Jack Dorsey stepped down earlier this year following criticism from Elliott that he was not focused enough on Twitter solely.