Offer Update

RNS Number : 6207E

WPP Group PLC

29 September 2008

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, INTO AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

29 September 2008

WPP GROUP PLC (“WPP”)

TAYLOR NELSON SOFRES PLC (“TNS”) – OFFER UPDATE

OFFER ACCEPTANCES AND 

PROPOSAL TO INTRODUCE NEW WPP PARENT COMPANY

Offer acceptances

As at 2.30 p.m. (London time) on 29 September 2008, valid acceptances of the Offer had been received in respect of a total of 178,945,742 TNS Shares, representing approximately 42.87 per cent. of the existing issued share capital of TNS. The Offer (including the Mix and Match Facility) remains open for acceptance until 3.00 p.m. (London time) on 3 October 2008.

Terms of the Offer

As previously announced, the WPP Offer for TNS is being made on the following basis:

For each TNS Share

173 pence in cash and 0.1889 of a New WPP Share

Based on a Closing Price of 439.25 pence per WPP Share on 29 September 2008, the Offer values each TNS Share at approximately 256 pence and the entire issued and to be issued share capital of TNS at approximately £1,122 million. The Offer represents a premium of approximately:

• 50 per cent. over the Closing Price of 171 pence per TNS Share on 28 April 2008, being the last Business Day prior to the announcement by TNS of a potential merger with GfK Aktiengesellschaft; and

• 19 per cent. over the Closing Price of 215 pence per TNS Share on 2 May 2008, being the last Business Day prior to the announcement by TNS that it had received a proposal from WPP,

in each case based on the Closing Price of 439.25 pence per WPP Share on 29 September 2008.

WPP believes the Offer provides a substantial premium for TNS Share Owners with both cash certainty and potential equity upside. 

As disclosed in paragraph 4.4 of Part 7 of the Offer Document and the announcement by WPP on 29 August 2008, persons presumed to be acting in concert with WPP in respect of the Offer have an interest in an aggregate amount of 64,798 TNS Shares (representing approximately 0.02 per cent. of the existing issued share capital of TNS). Save as disclosed, as at 2.30 p.m. (London time) on 29 September 2008, neither WPP nor any person acting in concert with WPP had any interest in any relevant securities of TNS.

WPP proposal to introduce a new UK-listed parent company

WPP has today announced a proposed court-sanctioned scheme of arrangement relating to the corporate structure of WPP (the ''Scheme''). This will entail creating a new UK-listed, Jersey incorporated parent company for the WPP group.

WPP is an international business, with over 110,000 people (including associate companies) working for its group companies in 106 countries. In recent years, the UK has contributed less than 15 per cent. of WPP's revenues and headline profits before tax.

For historical reasons, the WPP group's parent company has been incorporated and tax resident in the UK. As a result of recent concerns regarding possible changes to the UK's taxation of foreign profits, the board of WPP has reassessed the location of the parent company of the WPP group and, given these concerns and the complexity of the current UK tax system, it has concluded that the long term interests of the WPP group and its share owners are best served by a new parent company corporate structure.

The board of WPP believes that the most appropriate structure to protect the WPP group's taxation position and to better facilitate its financial management is to introduce a new Jersey incorporated parent company for the WPP group, that will be tax resident in the Republic of Ireland. This should provide the opportunity to reduce the overall tax rate of the group in the short to medium term.

This international parent company structure should allow WPP to continue its successful strategy of developing its portfolio internationally, particularly in fast-growing geographic markets such as Brazil, Russia, India and China and also in other countries in Asia, Latin America, Africa and the Middle East and Central and Eastern Europe.

The Scheme will not result in any changes in the day-to-day conduct of the business of the WPP group or its strategy. The new parent company, which is to be called WPP plc, will have its primary listing on the London Stock Exchange and its American Depositary Shares will be traded on NASDAQ. It will also continue to report in sterling.

The new parent company will have the same board and management team as WPP on the date that the Scheme becomes effective. The implementation of the Scheme will not make any substantial changes to corporate governance, to existing investor protection measures, nor to the existing dividend policy and share repurchase programme of WPP. The implementation of the Scheme is not expected to have any adverse tax implications for WPP  Share Owners.

The new parent company will, shortly after the Scheme becomes effective, put in place a dividend access plan. This plan is designed to ensure that, as under current WPP dividend payment arrangements, share owners in the new parent company may continue to receive UK dividends which means, in particular, that under the plan no tax is required to be withheld from the payment of dividends to shareholders in the new parent company.

The Scheme will require the approval of WPP Share Owners at a meeting to be convened at the direction of the High Court of England and Wales, and also at a separate general meeting of WPP. These meetings are expected to be convened to be held on 30 October 2008. In addition, the Scheme will require the sanction of the High Court.

If the requisite approvals are obtained and all necessary action is taken to make the Scheme effective, it is currently expected that the Scheme will become effective on or around 19 November 2008. Under the terms of the Scheme, the new parent company will issue new ordinary shares to WPP Share Owners on the register of members of WPP at the close of business on the business day immediately preceding the effective date of the Scheme (the ''Scheme Record Time'') on a one-for-one basis. Each WPP Share Owner will own an identical number of ordinary shares in the new parent company as was owned in WPP.

Effect of the Scheme in relation to the TNS Offer

If the TNS Offer becomes unconditional in all respects and the Scheme subsequently becomes effective, the Scheme and related proposals will have the following effect in relation to the share consideration receivable by TNS Share Owners under the TNS Offer: 

(a) to the extent that TNS Share Owners who have validly accepted the TNS Offer are issued with New WPP Shares before the Scheme Record Time (currently anticipated to be 6.00 p.m. (London time) on or around 18 November 2008), such accepting TNS Share Owners who become WPP Share Owners by the Scheme Record Time will, like all other WPP Share Owners at such time, receive one ordinary share in the new parent company for each New WPP Share cancelled under the Scheme; and

(b) to the extent that TNS Share Owners are issued with New WPP Shares after the Scheme Record Time, either as a result of validly accepting the TNS Offer or as a result of WPP exercising its rights pursuant to the provisions of Part 28 of the Companies Act to acquire compulsorily any remaining TNS shares in respect of which acceptances have not been received, the New WPP Shares to which such TNS Share Owners become entitled will be transferred to the new parent company which will issue one ordinary share for each New WPP Share so transferred to it.

Accordingly, if the Offer becomes unconditional in all respects and if the Scheme subsequently becomes effective, TNS Share Owners can expect to receive shares in the ultimate parent company of the WPP group which will be admitted to the Official List and admitted to trading on the London Stock Exchange's main market for listed securities.

A circular containing further information in relation to the proposal to introduce a new UK-listed parent company for the WPP group, including the expected timetable of principal events in relation to the Scheme process, will be sent to TNS Share Owners shortly. It is expected that further documentation in relation to the Scheme, principally comprising a circular to WPP Share Owners and a prospectus in relation to admission to the Official List of the ordinary shares in the proposed new parent company, will be published on or around 6 October 2008. The latest date for WPP Share Owners to lodge forms of proxy in respect of the meetings required to approve the Scheme is expected to be 28 October 2008.

Action to be taken to accept the WPP Offer

TNS Share Owners who hold TNS Shares in certificated form (that is, not in CREST), should complete the Form of Acceptance and Election in accordance with paragraph 14.1 of Part 1 of the Offer Document. They should return the completed and signed Form of Acceptance and Election (along with any appropriate document(s) of title including their share certificate(s)) using the reply-paid envelope that was enclosed with the Offer Document (if they are posting within the United Kingdom) as soon as possible and, in any event, so as to be received by no later than 3.00 p.m. (London time) on 3 October 2008.

TNS Share Owners who hold TNS Shares in uncertificated form (that is, in CREST), should follow the procedures set out in paragraph 14.2 of Part 1 of the Offer Document, so as to ensure that their TTE instruction(s) settle(s) no later than 3.00 p.m. (London time) on 3 October 2008.

TNS Share Owners who require assistance in accepting the Offer (or who require a replacement Form of Acceptance and Election) should telephone Computershare Investor Services PLC (the receiving agent for the Offer), on 0870 707 1367 (from within the United Kingdom) and [phone] (from outside the United Kingdom). However, TNS Share Owners should be aware that Computershare Investor Services PLC cannot provide any financial, legal or taxation advice in connection with the Offer nor any advice on the merits of the Offer. 

TNS Share Owners who are in any doubt as to what action to take are recommended to seek their own personal financial advice immediately from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if they are resident in the United Kingdom or, if not, from another appropriately authorised financial adviser in their own jurisdiction.

Enquiries:

BUCHANAN COMMUNICATIONS	[phone]
Richard Oldworth
MERRILL LYNCH INTERNATIONAL	[phone]
Richard Taylor
Mark Astaire (Corporate Broking)
PERELLA WEINBERG PARTNERS UK LLP	[phone]
Philip Yates
Graham Davidson
GOLDMAN SACHS INTERNATIONAL
James Del Favero	[phone]
Simon Dingemans	[phone]

Capitalised terms used in this announcement have the same meaning as defined in WPP's Offer Document dated 1 August 2008.

Merrill Lynch International, Perella Weinberg Partners UK LLP and Goldman Sachs International are acting exclusively for WPP in connection with the Offer and no one else and will not be responsible to anyone other than WPP for providing the protections afforded to clients of Merrill Lynch International, Perella Weinberg Partners UK LLP or Goldman Sachs International, respectively, nor for providing advice in connection with the Offer or any matter referred to in this announcement.

The directors of WPP accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of WPP (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect its import.

IMPORTANT NOTICES

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements of their jurisdictions. The Offer Document has been prepared in accordance with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if it had been prepared in accordance with the laws and regulations of jurisdictions outside England.

The availability of the Offer to persons who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located.

The Offer is not being made, directly or indirectly, in or into Australia, Canada or Japan or any other jurisdiction where to do so would constitute a breach of relevant laws in that jurisdiction, and the Offer will not be capable of acceptance from or within any such jurisdiction. Accordingly, copies of this announcement are not being, and must not be, mailed or otherwise forwarded, transmitted, distributed or sent (directly or indirectly) in or into Australia, Canada or Japan or any other jurisdiction where to do so would constitute a breach of relevant laws in that jurisdiction, and persons receiving this announcement (including agents, nominees, custodians and trustees) must not mail or otherwise distribute or send it in or into such jurisdictions as doing so may invalidate any purported acceptance of the Offer.

This announcement is not an offer of securities for sale in Australia, Canada or Japan or in any other jurisdiction in which such an offer is unlawful. The New WPP Shares, which form part of the consideration under the Offer, have not been, and will not be, registered under the securities laws of Australia, Canada or Japan, and no regulatory clearance in respect of the New WPP Shares has been, or will be, applied for in any jurisdiction other than the United Kingdom. The New WPP Shares may not be offered, sold or delivered, directly or indirectly, in or into Australia, Canada or Japan or to, or for the account or benefit of, any resident of Australia, Canada or Japan except pursuant to an applicable exemption from, or in a transaction not subject to, applicable securities laws of those jurisdictions.

Notice to US Persons

The Offer is for the securities of a United Kingdom company and is subject to United Kingdom legal requirements, which are different from those of the United States. The Offer is being made in the United States in compliance with applicable tender offer rules under the US Exchange Act as modified by the "Tier II" exemption provided by Rule 14d-1(d) under such Act and otherwise in accordance with the requirements of the City Code. Accordingly, the Offer is subject to disclosure and procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that differ in some respects from those applicable under US domestic tender offer procedures and law.

This announcement is not an offer of securities for sale in the United States. The New WPP Shares which form part of the consideration under the Offer have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States. The New WPP Shares may not be offered, sold or delivered, directly or indirectly, in or into the United States or to, or for the account or benefit of, any US Person except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. Accordingly, unless WPP is satisfied in its sole discretion that the New WPP Shares can be offered, sold or delivered to a particular US Person, or for his account or benefit, pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act, a US Person who validly accepts the Offer will receive, in lieu of the New WPP Shares to which he would otherwise be entitled under the terms of the Offer, the net cash proceeds of the sale of such shares, as more fully described in the Offer Document.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code, if any person is or becomes "interested" (directly or indirectly) in one per cent or more of any class of "relevant securities" of WPP or TNS, all "dealings" in any "relevant securities" of WPP or TNS by such person (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "Offer Period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of WPP or TNS, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of WPP or TNS, by WPP or TNS or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Takeover Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Takeover Panel.

 

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