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Nielsen Holdings has rejected its acquisition by a consortium of private equity firms, following strong refusal from the board of directors. It is to be noted that the stock plummeted 6.9% after the U.S. market closed on Monday.
Per the board of directors, the consortium significantly undervalued Nielsen by placing its buyout value at $25.40 per share. Further, the share price does not adequately compensate shareholders for the company’s prospects.
It is worth mentioning that one of its largest shareholders, Windacre Partnership LLC, supported the rejection proposal stating that the intrinsic value of the company is more than $40 per share due to its strong position in the television rating space.
Windacre, having a 9.6% stake in NLSN and more than 14.4% interest related to swaps, reportedly told that it would have voted against the deal even if Nielsen had agreed to the offer.
Following the refusal, Nielsen announced plans to buy back its shares in a bid to provide a boost to share value. It approved a billion-dollar buyback authorization. The share repurchase is expected to commence after the company reports first-quarter earnings on Apr 21.
This is likely to aid the company in gaining investors’ confidence in the near term.
Nielsen — which has long been collecting information, measuring audience and analyzing consumer behavior in the television market — remains confident about its fundamentals, given its strong refusal to acquisition.
The company is working with MRC and MRC-sanctioned auditors for reaccreditation, which remains a positive factor.
Further, Nielsen’s aggressive stance toward its cross-platform measurement solution, Nielsen ONE, remains noteworthy. The solution provides advertisers and publishers with audience reach and frequency metrics across linear programming, streaming, connected TV, and digital channels.
Additionally, the company recently announced an advancement to Nielsen ONE with Nielsen ONE Alpha deduplicate ad measurement that offers comparability and audience deduplication across all screens including linear TV, connected TV, computer, and mobile.
These initiatives are positioning Nielsen well to retain momentum in the media ecosystem. Further, the growing efforts will continue to help the company achieve strong revenue growth. It generated revenues of $3.5 billion in 2021, increasing 4.1% on a reported basis.
Zacks Rank & Other Stocks to Consider
Currently, Nielsen carries a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Nielsen (NLSN) Rejects Buyout Offer Citing Undervaluation
Nielsen Holdings has rejected its acquisition by a consortium of private equity firms, following strong refusal from the board of directors. It is to be noted that the stock plummeted 6.9% after the U.S. market closed on Monday.
Per the board of directors, the consortium significantly undervalued Nielsen by placing its buyout value at $25.40 per share. Further, the share price does not adequately compensate shareholders for the company’s prospects.
It is worth mentioning that one of its largest shareholders, Windacre Partnership LLC, supported the rejection proposal stating that the intrinsic value of the company is more than $40 per share due to its strong position in the television rating space.
Windacre, having a 9.6% stake in NLSN and more than 14.4% interest related to swaps, reportedly told that it would have voted against the deal even if Nielsen had agreed to the offer.
Following the refusal, Nielsen announced plans to buy back its shares in a bid to provide a boost to share value. It approved a billion-dollar buyback authorization. The share repurchase is expected to commence after the company reports first-quarter earnings on Apr 21.
This is likely to aid the company in gaining investors’ confidence in the near term.
Nielsen Holdings Plc Price and Consensus
Nielsen Holdings Plc price-consensus-chart | Nielsen Holdings Plc Quote
Bottom Line
Nielsen — which has long been collecting information, measuring audience and analyzing consumer behavior in the television market — remains confident about its fundamentals, given its strong refusal to acquisition.
The company is working with MRC and MRC-sanctioned auditors for reaccreditation, which remains a positive factor.
Further, Nielsen’s aggressive stance toward its cross-platform measurement solution, Nielsen ONE, remains noteworthy. The solution provides advertisers and publishers with audience reach and frequency metrics across linear programming, streaming, connected TV, and digital channels.
Additionally, the company recently announced an advancement to Nielsen ONE with Nielsen ONE Alpha deduplicate ad measurement that offers comparability and audience deduplication across all screens including linear TV, connected TV, computer, and mobile.
These initiatives are positioning Nielsen well to retain momentum in the media ecosystem. Further, the growing efforts will continue to help the company achieve strong revenue growth. It generated revenues of $3.5 billion in 2021, increasing 4.1% on a reported basis.
Zacks Rank & Other Stocks to Consider
Currently, Nielsen carries a Zacks Rank #1 (Strong Buy).
Investors interested in the business services sector can also consider stocks like Cross Country Healthcare (CCRN - Free Report) , The Hackett Group (HCKT - Free Report) and WNS (WNS - Free Report) . While Cross Country Healthcare sports a Zacks Rank #1, The Hackett Group and WNS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare has gained 71.6% in the past year. The long-term earnings growth rate for the stock is currently projected at 6.6%.
The Hackett Group has gained 34.8% in the past year. The long-term earnings growth rate for the stock is currently projected at 15.5%.
WNS has gained 19.8% in the past year. The long-term earnings growth rate for the stock is currently projected at 15.2%.