WPP asks TNS shareholders to press board for talks

By Kate Holton

LONDON (Reuters) - Advertising group WPP (WPP.L) has urged Taylor Nelson Sofres TNS.L to engage in talks over a possible offer, sending shares in the market research firm up over 13 percent as investors eyed a looming bid battle.

Taylor Nelson (TNS) said on Sunday it had rejected a 230 pence a share, or 950 million pound, offer from WPP, saying it preferred to press ahead with talks on a nil-premium merger with Germany's Gfk (GFKG.DE).

Analysts interpreted the WPP move as opportunistic, with the world's second largest advertising company looking to acquire the smaller market research firm before it becomes a larger entity with a blocking shareholder.

But they also thought WPP could return with a higher offer.

"We are surprised and disappointed that the board of TNS has rejected our offer proposal within 24 hours of receipt," WPP Chief Executive Martin Sorrell said in a statement.

"While we continue to review our position, we encourage TNS shareholders to urge their board to engage with us rather than simply persisting on an exclusive basis with a 'nil premium merger' arrangement with GfK."

TNS shares were up 11.6 percent to 240 pence at 11:05 a.m. on Tuesday.

Taylor Nelson provides data analysis for clients such as Procter & Gamble (PG.N) and analysts believe the industry will hold up well during a downturn as companies still need information on their products and markets.