Thu. Jul 7th, 2022

Television ratings group Nielsen is nearing a $ 15bn deal to be acquired by a consortium of private equity buyers led by Elliott Management and Brookfield Asset Management in what would be the largest company takeover since Russia’s invasion of Ukraine.

Elliott and Brookfield are finalizing a financing package with multiple large banks, said people briefed about the matter, adding that a deal could be announced within a week. The transaction could still fall apart as the talks are ongoing.

A deal would be a major test of takeover financing after global equity markets have sold off sharply in 2022 on fears of rising interest rates and the outbreak of war in Europe. Elliott and Brookfield declined to comment.

It would also signal that private equity buyers remain confident Nielsen’s core business of measuring advertising reach on cable and broadcast networks has a future despite being threatened by the rise of streaming platforms such as Netflix, Amazon and Hulu. For years, Nielsen has struggled to retain its dominance as an intermediary for buyers of advertising.

Some industry observers say there is an opportunity in the market for companies that could offer more sophisticated audience data about streaming services. Netflix has recently started releasing its top 10 shows every week, but such figures lack context. Most streaming services offer even less viewer data.

Elliott’s move to put together a consortium to buy Nielsen further highlights how the hedge fund best-known for buying small stakes and waging bruising activist campaigns at target companies is embracing private equity dealmaking.

Recent private equity deals undertaken by Elliott include the $ 16.5bn takeover of software company Citrix in January and the $ 17bn sale of Athenahealth to a consortium of private equity buyers.

While financing costs are rising because of rising interest rates and greater volatility, the market remains open for big leveraged buyouts. In March, a consortium of Advent International, Permira and Crosspoint Capital completed the more than $ 14bn takeover of McAfee, just days after Russia’s invasion.

Elliott, who first invested in Nielsen in 2018, had earlier forced the media data company to explore a sale which attracted multiple bids from private equity groups, including one led by Blackstone and Hellman & Friedman and another from Chicago-based Madison Dearborn.

Ultimately, Nielsen decided to remain independent and in 2020 sold its Global Connect unitwhich tracks sales of consumer goods, to buyout group Advent International for $ 2.7bn.

At a $ 15bn enterprise value, the proposed takeover would value Nielsen at about $ 27 a share – a roughly 60 per cent premium to the group’s undisturbed market value, according to analyst Hunter Martin of CreditSights.

The Wall Street Journal first reported on Monday that a consortium led by Elliott was in advanced talks to buy Nielsen. A day later Bloomberg reported that Brookfield was part of the consortium.

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