Subject category:
Strategy and General Management
Published by:
INSEAD
Version: 04.2007
Length: 23 pages
Data source: Published sources
Abstract
The case focuses on the Nielsen Company, formerly known as VNU, facing investor opposition to its acquisition of IMS Health for 5.8 billion euros. It first describes the history of VNU and the strategy of its Chief Executive Officer, Robert van den Bergh, as it redeploys its assets between 2000 and 2005 towards marketing information, and away from print media. The case then focuses on the acquisition of IMS Health, which immediately becomes contested by activist investors Knight Vinke, joined by other regular investors such as Templeton and Fidelity. Meanwhile, a private equity group that includes Kohlberg Kravis Roberts and Blackstone, is considering whether to take VNU private. The Board is considering its position carefully. The purpose of the case is to illustrate the dilemma facing the board members now that a new wave of active investors and hedge funds is increasingly questioning management strategies, and making their voice heard. What is the role of the Board vis-a-vis investors? How supportive can they be of management plans when they face shareholder challenge? To what extent are these investors purely event driven and to what extent do their arguments hold merit? How is best to navigate in an environment where these hedge funds and other active owners have become a powerful reality?
About
Abstract
The case focuses on the Nielsen Company, formerly known as VNU, facing investor opposition to its acquisition of IMS Health for 5.8 billion euros. It first describes the history of VNU and the strategy of its Chief Executive Officer, Robert van den Bergh, as it redeploys its assets between 2000 and 2005 towards marketing information, and away from print media. The case then focuses on the acquisition of IMS Health, which immediately becomes contested by activist investors Knight Vinke, joined by other regular investors such as Templeton and Fidelity. Meanwhile, a private equity group that includes Kohlberg Kravis Roberts and Blackstone, is considering whether to take VNU private. The Board is considering its position carefully. The purpose of the case is to illustrate the dilemma facing the board members now that a new wave of active investors and hedge funds is increasingly questioning management strategies, and making their voice heard. What is the role of the Board vis-a-vis investors? How supportive can they be of management plans when they face shareholder challenge? To what extent are these investors purely event driven and to what extent do their arguments hold merit? How is best to navigate in an environment where these hedge funds and other active owners have become a powerful reality?