Nielsen (NLSN) Stock Plunged 17.9% After Rejecting a PE Takeover Offer

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Simon Mugo
Updated: 21 Mar 2022

Key points:

  • The Nielsen stock price plunged 17.9% after rejecting a takeover offer.
  • The company rejected the deal saying it undervalues its assets and business.
  • The shares had recouped most losses on the $1B share repurchase program.

The Nielsen Holdings PLC (NYSE: NLSN) stock price plunged 18.8% during premarket trading after the company’s board rejected the unsolicited acquisition offer from a private equity consortium.

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The board mentioned that it had rejected the offer because one of its leading shareholders, WindAcre, was opposed to the deal and had indicated that it would oppose it as a majority shareholder if the board decided to accept the offer.

The board had no choice in the matter since the deal was unlikely to proceed without WindAcre’s approval.

Luckily for investors, the company announced that it would resume the $1 billion share purchase program that the board had approved before the consortium’s offer.

The board had halted the share repurchase program to consider the private equity consortium’s offer, which valued Nielsen’s stock at  $25.40 per share.

WindAcre had initially expressed interest in joining the private equity consortium in taking Nielsen Holdings private. Still, the two parties did agree despite the company’s board allowing WindAcre to enter into a confidentiality agreement with the consortium.

WindAcre said that it believes the offer by the private equity consortium undervalues the company indicating that the PE group was not keen to raise its offer price from the initial figure valuing each Nielsen share at $24.50.

The outcome of the negotiations between WindAcre and the private equity consortium sends a clear message that any future offers must quote a higher price than the one offered by the previous bidders and that all successful offers must get WindAcre’s approval.
The board also said that it had assessed the deal with the help of its independent financial and legal advisors and discussions with WindAcre before deciding to reject the offer.

Nielsen shares had recouped most of their losses by writing as markets reacted positively to the share repurchase program that will likely raise the company’s share price in the future.

The share repurchase program is expected to kick off on April 21, 2022, after the company releases its third-quarter earnings results. The program shall be subject to Nielsen's prevailing stock price, market conditions, legal requirements and other factors.

Nielsen shares are up 19.16% in 2022 and could be higher once the share repurchase program is underway.

*This is not investment advice. Always do your due diligence before making investment decisions.

Niesen Holdings stock price

Nielsen Holdings stock price 21-03-2022
Source: Tradingview

Nilsen Holdings' stock price plunged 18.78% to trade at $19.85, falling from Friday’s closing price of $24.44.

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