TNS rejects WPP again after GfK drops takeover bid
Mapeley receives unnamed proposalCONFIDENCE
TNS shares have leapt 57 percent since it became a takeover target in late April and are now trading around the WPP offer level, but Lowden said a higher price was justified by TNS's strong performance and prospects.
Recent deals in the sector had valued acquired companies at 12.5-14.5 times earnings before interest, tax, depreciation and amortisation, Lowden said, compared with WPP's offer, which he said was worth about 11.5 times TNS's EBITDA.
Numis, commenting that TNS's results were slightly ahead of its estimates, said it considered the WPP bid "a fair offer in light of the challenging economic and financial outlook".
For the first half of the year, TNS reported underlying revenue growth of 5.1 percent to 567 million pounds and said its order book gave it confidence in its full-year target to increase underlying sales by about 6 percent.
Adjusted operating profit, excluding restructuring costs and amortisation of acquired intangible assets, grew 19.6 percent to 54.3 million pounds in the period, and TNS increased its interim dividend by 25 percent to 2 pence per share.
TNS said it had seen growth in all regions of the world, particularly in Germany, Spain and Russia and including the United States, despite a "more challenging marketplace" there.
The company, which is a market leader in customised information and analysis, said it had won new business from customers including Danone, Telefonica and LG in recent weeks.
TNS trades at 14.4 times expected 2009 earnings, a substantial premium to the European advertising sector average of 10.9, according to Reuters Estimates.
(Additional reporting by Peter Dinkloh in Frankfurt)
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