Business information and media firm VNU said Nov. 17 that it terminated a planned $7 billion takeover of health care data provider IMS Health Inc. after overwhelming shareholder opposition.
NEW YORK (The Hollywood Reporter) -- Business information and media firm VNU said Nov. 17 that it terminated a planned $7 billion takeover of health care data provider IMS Health Inc. after overwhelming shareholder opposition.
As a result of the failed deal, which is the latest sign that institutional shareholders increasingly are asserting their power, VNU CEO Rob van den Bergh said he will step down once a successor is found.
VNU, the parent company of The Hollywood Reporter, Billboard magazine and Nielsen Media Research among others, will pay IMS $15 million for out-of-pocket costs related to the planned transaction.
Under the termination agreement, VNU also agreed to pay an additional $45 million to IMS if VNU agrees to be acquired during the next year. IMS must pay VNU $15 million if it finds a new partner during the next year.
Institutional shareholders of VNU criticized the proposed deal and instead pushed for an increased stock buyback program, as well as possible divestitures.
VNU on Nov. 17 said investors holding nearly a 50% stake in the firm opposed the merger. Nonetheless, the firm and IMS will pursue possible partnerships in various areas, van den Bergh said.
With the IMS deal off the table, VNU said that it plans to return €1 billion ($1.2 billion) to shareholders in the near future in addition to a regular dividend it pays.
The company also said it will expand cost-cutting efforts across all operations, with detailed targets to come by its full-year earnings report March 8. "The main area of cost savings could be from sharing data factories between media measurement and marketing information," UBS analysts Polo Tang and Mike Hilton said in a research note Nov. 17.
VNU also will continue to evaluate targeted divestitures or acquisitions to "enhance existing lines off business," as well as pursue a New York Stock Exchange listing to raise its public profile and expand its shareholder base.
Some on Wall Street, however, have said that several private equity firms have started looking at a possible takeover of VNU.