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Brookfield Asset Management is part of an investment group that hopes to take iconic television-ratings company Nielsen Holdings plc private in a US$10-billion deal.
The group, which is led by activist investors Elliott Investment Management L.P., convinced the Nielsen board to agree to a US$28-per-share offer for its New York Stock Exchange listed shares after rejecting an earlier bid.
Nielsen, which traded for US$17.51 per share as recently as March 11, said on March 20 that it had turned down an offer of US$25.40 for its stock.
The consortium will take on just over US$5.8-billion in Nielsen debt, prompting Nielsen to label the transaction a US$16-billion deal.
Brookfield’s part of the deal will be conducted via its Brookfield Business Partners LP entity, which trades separately from the parent on the Toronto and New York stock exchanges. Brookfield says it will put US$600-million of its own money in the deal, and will bring other unnamed institutional partners in to buy a total of US$2.5-billion in preferred equity in the new Nielsen structure.
That preferred equity will be convertible into 45 per cent of Nielsen’s stock, post-transaction. Brookfield “will be actively involved in the company’s governance,” it said in a statement.
While many know Nielsen for its television ratings, the company has branched out into measures of audience and other data and analytics across multiple platforms, in 55 countries. It had US$3.5-billion in revenue last year.
Dave Gregory, a managing partner at Brookfield Business Partners, said in a statement that Nielsen is “a market-leading company that is deeply embedded in the media ecosystem as a trusted service provider to its customers. Nielsen is well positioned to lead the industry into the next generation of audience measurement across all channels and platforms.”
When Nielsen rejected the lower offer earlier this month, it said The WindAcre Partnership LLC, which owns 9.6 per cent of the company, had advised it that it opposed the deal and would acquire additional shares so that it could prevent shareholder approval of the proposed transaction. Windacre, Nielsen said, declined to join the Elliott-Brookfield consortium.
Nielsen said WindAcre’s ownership disclosures on March 14 said the investor had economic exposure to 51,914,900 Nielsen shares, or 14.44 per cent of Nielsen, through total return swaps. That is in addition to its 9.6 per cent common-share ownership.
Under United Kingdom law, a takeover requires approval of at least 75 per cent in value of the shares voting on the transaction. While Nielsen is headquartered in New York City, it is registered as a UK corporation.
The transaction agreement provides for a 45-day “go-shop” period, during which Nielsen will actively solicit, evaluate and possibly enter into negotiations with parties that offer alternative proposals, Nielsen said. Following the period, Nielsen will be permitted to continue discussions with any person or group that submitted a qualifying proposal during the 45-day period, if the Nielsen board determines the proposal is superior to this transaction.
Any competing bidder would pay the US$102-million termination fee owes the Elliott-Brookfield consortium if it backs out.
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