WPP questions synergies from TNS and GfK merger

By Kate Holton

LONDON (Reuters) - Advertising group WPP wants access to the books of takeover target Taylor Nelson Sofres because it believes a planned merger between TNS and Germany's GfK will not maximise synergies.

British market research firm Taylor Nelson on Tuesday rejected an improved 996 million pounds takeover approach from WPP and said it instead wants to press ahead on the talks with German market research firm GfK.

But WPP Group Chief Executive Martin Sorrel said he was disappointed his latest attempt to engage with TNS management had met with continued resistance.

"The benefits of the nil-premium merger with GfK ... have yet to be made clear to TNS shareholders. We also believe that the proposed structure of the nil-premium merger with GfK is not conducive to maximising synergies," Sorrell said in a statement.

Taylor Nelson says it expects to announce the potential benefits of its merger deal shortly.

Analysts noted the latest bid from WPP was below the target's share price and thought WPP could afford to return with an even higher price. Taylor Nelson shares were up 2.5 percent at 252-1/4p by 12:10 p.m..

The latest WPP approach valued TNS at 241.8 pence per share, based on the Monday closing price of WPP. TNS earlier this month rejected a 230 pence per share offer from WPP.

But analysts at Citigroup argued the latest moves could make a deal between WPP and Taylor Nelson less likely.