A private-equity consortium's bid for Nielsen Holdings PLC may prove crucial for the TV ratings company, which is seeking to regain its stature after drawing criticism for its flaws in audience measurement during the COVID-19 pandemic.
The consortium, which includes Elliott Management Corp., is reportedly in advanced talks to take Nielsen private for about $15 billion, including debt. The proposed deal is substantial, given Nielsen's market value of $6.29 billion and enterprise value of over $11.92 billion prior to reports of the offer.
In the wake of the offer, shares in Nielsen surged, pushing its market cap to $8.60 billion and its total enterprise value over $14.23 billion as of market close March 17, according to S&P Global Market Intelligence.
Nielsen did not respond to a request for comment on the offer.
The interested buyers are still holding financing talks with banks, according to The Wall Street Journal. A deal could materialize within a matter of weeks, or it could fall apart completely.
On the same day as the Journal report, hedge fund The WindAcre Partnership LLC, which holds a 9.6% stake in Nielsen, filed an SEC filing stating that it believes Nielsen shares are "deeply undervalued and represent an attractive investment opportunity."
WindAcre said it intends to discuss the company's operations and management, as well as potential sale transactions, with Nielsen leadership.
The hedge fund ranks as the third-largest holder of Nielsen shares behind Vanguard Group Inc. and FMR LLC. Elliott, with a 4.6% stake, comes in at No. 9.
Nielsen struggled during the pandemic amid complaints about its audience measurement process. The company admitted to undercounting some out-of-home viewership under its national TV estimates, prompting the Media Rating Council to suspend accreditation for some of Nielsen's services. Nielsen said it is committed to resolving the industry watchdog's suspension.
Amid the complaints, some media companies began tests to seek ratings alternatives with iSpot.tv Inc., VideoAmp Inc., Comscore Inc. and other measurement firms.
Nielsen, for its part, is launching Nielsen One, a new ratings system that would incorporate digital viewing statistics. The company is on track to release the product in the fourth quarter of 2022.
But the issue seems far from over. Days after Nielsen's reported potential takeover, Allen Media Group LLC sued the former over alleged fraud for failing to reveal that its panel system for measuring TV audience viewership was "unreliable" across all networks. The owner of several TV networks and streaming platforms claimed Nielsen's underreporting resulted in the industry losing billions of dollars.
Nielsen CEO David Kenny recently said the company may pursue strategic M&A "if and when it makes sense."
Total revenue fell 46.13% to $842 million in the first quarter of fiscal 2020 and has since largely remained within the same level.
