What happened
Shares of Nielsen Holdings (NLSN) charged sharply higher on Tuesday, surging as much as 21.5%. As of 10:55 a.m. ET today, the stock was still up 21.4%.
The catalyst that sent the television ratings and data analytics platform higher were reports that a deal had been reached that could allow a proposed buyout to move forward.
So what
A consortium of private equity investors, led by Elliott Investment Management and Brookfield Business Partners, had inked a definitive agreement to buy Nielsen, but not everyone was on board with the buyout. Nielsen's largest shareholder, WindAcre Partnership (with 27% of the stock), had come out against the deal, suggesting it undervalued the company.
In a press release, Nielsen announced today that it was postponing its shareholder vote, as it appears the parties might have reached a tentative agreement that will allow the buyout to move forward. Under the revised deal, WindAcre will join the consortium of investors buying Nielsen and retain a portion of its equity investment in the company once it is taken private, while agreeing to sell the remainder of its shares.
The special meeting of shareholders that was scheduled to vote on the original agreement has been postponed, as has the court meeting necessary for approval, to allow the parties time to complete a final agreement, though the deal could still fall through.
Now what
Nielsen is known for its namesake television ratings system, though the business of providing viewership estimates has suffered in recent years as viewers abandoned traditional broadcast television and cable networks in favor of streaming video. Indeed, prior to the buyout reports, Nielsen stock was trading for roughly one-third of its high reached back in 2016.
Given the continuing evolution of the entertainment landscape, this deal could be the best result for longtime investors.
