Deals and IPOs

Activist hedge fund Elliott Management pushes for outright sale of Nielsen, source says

Key Points
  • When Nielsen reported second-quarter earnings in late July, its board announced an in-depth strategic review of Nielsen's "Buy" segment, which provides retailers with sales and market-share data.
  • Elliott, the firm founded and led by billionaire Paul Singer, revealed in a regulatory filing that it has economic exposure to about 30 million shares representing about 8.4 percent of the $9 billion company.
  • The filing also indicated that Elliott intends to push for a sale of the company or individual businesses.
Paul Singer, founder of Elliott Management, speaking at Delivering Alpha in New York on Sept. 13, 2016.
David A. Grogan | CNBC

Shares of Nielsen Holdings jumped 12 percent on Monday after Elliott Management disclosed a stake and said that it was pushing for a sale.

Nielsen provides information on what consumers watch and buy. Elliott, the firm founded and led by billionaire Paul Singer, revealed in a regulatory filing that it has economic exposure to about 30 million shares representing about 8.4 percent of the $9 billion company. The filing also indicated that Elliott intends to push for a sale of the company or individual businesses.

At the time it reported second-quarter earnings in late July, the board announced that it would be conducting an in-depth strategic review of Nielsen's "Buy" segment, which provides retailers with sales and market share data.

But Elliott prefers that the company sell itself entirely, as opposed to a specific business, a person with knowledge of the plans said. The thought is that a buyout fund or several can help turn around the struggling "Buy" unit while it is still part of the larger company, said the person, who asked not to be named discussing private details about the potential transaction.

Nielsen has already fielded inbound interest from private equity firms, the person said. The company has a long history with buyout firms, having been taken private by a consortium of six firms in 2006 for about $10 billion. Those firms — which include Carlyle, Blackstone and KKR — took Nielsen public about seven and a half years ago.

Nielsen may be of interest to those firms, as buyout shops tend to favor assets they've previously owned. And they appear to have plenty of capital to deploy. Carlyle recently raised an $18.5 billion buyout fund — its largest ever — while Blackstone is reportedly in the process of raising a $20 billion buyout fund. In 2017, KKR raised a $14 billion buyout fund.

Carlyle, Blackstone and KKR declined to comment. Additionally, Nielsen's chairman, James Attwood, is also a managing director at Carlyle.

Elliott's private-equity arm, Evergreen Coast Capital Partners, may be interested in partnering with a buyout firm for the deal, the person said.

Nielsen has engaged J.P. Morgan to help with the strategic review and assess takeover offers, a person with knowledge of the matter said. J.P. Morgan declined to comment.

"Nielsen's Board of Directors and management team are actively focused on executing the company's strategy to achieve sustainable, profitable growth and drive long-term value creation for all shareholders," a company spokesperson said. "The board and management regularly engage with shareholders and welcome the views and perspectives of its owners, including Elliott."

Elliott, a diversified hedge fund with about $35 billion in assets under management, is among the busiest investors in a strategy known as activism, whereby an investor takes a stake in a company that it believes to be undervalued and then pushes for specific changes.

Nielsen was a prime candidate for that style of activism, given that its shares have slumped 40 percent in the year through Friday. The company has faced a variety of challenges — not limited to a weak second quarter, lower guidance and its chief executive officer stepping down. The company also faced pressure after Europe implemented the General Data Protection Regulation, or GDPR, which creates more stringent rules surrounding data privacy.

The Wall Street Journal reported earlier that Nielsen was the target of both an Elliott investment and buyout interest.