Sold! Valcon Successfully Acquires VNU

RENEE DIIULIO, SENIOR EDITOR
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Haarlem, The Netherlands—One of the most-watched acquisitions in the industry has finally reached a resolution: Valcon Acquisition BV has successfully acquired VNU NV. As of the May 19 acceptance deadline, 78.7 percent of VNU shares had been tendered, just under the 80 percent required for approval of the bid and enough to push the deal through. Total value of the bid is estimated at 7.6 billion euros or $9.7 billion.

Since the announcement, an additional 11.95% of the outstanding and issued shares have been tendered, bringing the total shares committed to the deal to more than 90 percent.

Valcon and VNU said they expected more shares to be tendered during the remainder of the post-acceptance period which remains open until June 9th, after which time Valcon said it planned to delist VNU.

The Largest LBO in the Media Sector, and One of the Largest in Any Industry

The transaction is the largest leveraged buyout (LBO) in the media and information sector, outpacing the acquisition of Seat Pagine Gialle, the Italian yellow pages company, in 2003.  BC Partners, CVC Capital Partners, Permira and Investitori Associati paid 5.7 billion euros for that company, according to Euroweek, a weekly international newspaper published in London.

Valcon’s acquisition of  VNU is also one of  the largest leveraged buyouts in history within  any industry, eclipsed only by the acquisition of RJR Nabisco Inc. for $31.4 billion in 1989; the purchase of TDC A/S, Denmark’s former phone monopoly, for a total of $15.3 billion in 2005; the $15 billion LBO of  Hertz in 2005; and the $10.8-billion acquisition of the financial software firm SunGard Data Systems Inc. last year.

Earlier, Valcon’s offer had been widely expected to fail. Many investors said the original bid was too low and felt the company could command a higher price if it was split into three parts and sold separately. Knight Vinke Asset Management led a vocal crusade against the deal. But Templeton Global Advisors, whose funds owned 14.7 percent of VNU shares, reviewed the terms and conditions of the revised offer and came out in support of the sweetened bid. Knight Vinke later gave up resistance.

Future Direction of VNU

With ownership cemented, attention now returns to VNU’s business, which includes three units: VNU Marketing Information (whose main business is ACNielsen), VNU Media Measurement & Information (main business: Nielsen Media Research) and VNU Business Information (which includes the company’s trade magazines and U.S. trade show division, VNU Expositions). As part of the deal, Valcon has agreed to maintain the company in whole for at least 18 months, meaning that there can be no major dispositions during that time.

A spokesperson for the consortium said that it was premature to comment on specific initiatives [regarding the direction of VNU] since the transaction is not yet complete. The next steps in the process include a delisting of VNU shares and election of a board of directors.

Valcon is a private-equity group comprised of affiliated funds of AlpInvest Partners NV, The Blackstone Group LP, The Carlyle Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. LP and Thomas H. Lee Partners, LP. Through the Blackstone Group’s business ties with Blantyre Partners, Robert Krakoff, the former chairman and CEO of Advanstar and the founder of Blantyre, was involved in the BtoB evaluation of VNU.

VNU CEO Rob F. van den Bergh stated he would step down after the deal is completed.

VNU Expositions and VNU Exhibitions Europe produce over 70 events in the U.S., Europe and Asia including GlobalShop,  Medtrade and ShoWest and have  a 58 percent stake in nearly 100 other expositions. Trade show revenues in the U.S. climbed 10% in 2005, as the group launched 10 new events lat year. VNU Expositions Asia continued to expand its activities in China, nearly doubling revenues there.

VNU Business Media publishes Adweek, Billboard and The Hollywood Reporter.

VNU contact: Will Thoretz at  (646) 654 8133.