Nielsen rejects private takeover bid

Media measurement firm Nielsen Holdings on Sunday said its board turned down a $15 billion buyout bid from a consortium of private-equity firms, arguing the transaction was "highly unlikely to receive shareholder approval" because it "does not adequately compensate shareholders for Nielsen's growth prospects."

Why it matters: Nielsen's stock jumped more than 40% last week in response to a Wall Street Journal report offer, a signal that the company's board may be more optimistic than is the market. Shares are down more than 18% in Monday pre-market trading.

• Elliott Management, which has been an investor in Nielsen for nearly four years, led the takeover effort. Private equity firm Brookfield also was reportedly involved.

Details: In a statement, Nielsen said its board unanimously decided to reject the bid in large part because one of its largest shareholders, The WindAcre Partnership, said the private bid undervalued Nielsen.

• Nielsen noted that WindAcre, which has been an investor in Nielsen since 2013, also informed Nielsen that if Nielsen accepted the proposal, it would acquire enough shares to prevent shareholder approval of the transaction.
• In its own statement, WindAcre said the bid "does not reflect the Company's progress on executing the Nielsen ONE roadmap," referencing Nielsen's plan to transition to cross-platform measurement.
• It also said the bid "is unattractive" relative to the valuation of Nielsen's peers and is "significantly below Nielsen's intrinsic value per share, which WindAcre assesses at well in excess of $40 per share."

The big picture: Nielsen is under extraordinary pressure to modernize its media measurement capabilities as dozens of new firms launch to take its market share.

• A private buyout would help Nielsen continue to transition from linear to digital media measurement without the hot spotlight of the private markets.

What they're saying: "We continue to have strong confidence in the management team and Nielsen's strategy to create long-term value for shareholders," said James A. Attwood, chairperson of the board.

• "We are always open to exploring any avenue to create value for shareholders, but the board is in agreement with WindAcre, one of our largest shareholders, that the consortium's proposal significantly undervalues the company."
• Nielsen also announced Sunday it intends to commence share repurchases under its previously approved $1 billion share repurchase authorization when the company's trading window opens.

Go deeper: Nielsen stock spikes on private sale talks