Tech

Research firm Nielsen to split into two separate publicly traded companies

Key Points
  • Nielsen on Thursday announced plans to split into two independent publicly traded companies.
  • The media research firm famous for its TV ratings said it would spin off its Global Connect business and create the two companies.
  • Activist investor Elliott Management, a large shareholder that had been pushing the company to find a buyer, said it supported Nielsen's decision to separate.
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Nielsen CEO on splitting into two independent, publicly-traded companies

Nielsen, the media research firm famous for its TV ratings, on Thursday, announced plans to split into two independent publicly traded companies.

The company said it would spin off its Global Connect business and create the two companies — Global Media and Global Connect.

"Both the Global Media and Global Connect businesses are independently essential to the industries they serve, but each business has unique dynamics," CEO David Kenny said in a statement. "Our decision to separate them marks a milestone in our strategic evolution and will best position each to serve the specific needs of their clients and successfully address rapidly changing dynamics in the marketplace."

As part of the split, the company plans to cut its dividend. Beginning with its next dividend payment in December, Nielsen will reduce its quarterly cash dividend payment to 6 cents a share from 35 cents a share. The dividend is payable on Dec. 5 to shareholders of record at the close of business on Nov. 21.

Activist hedge fund Elliott Management, which is one of the company's largest shareholders, had been pushing Nielsen to find a buyer. Nielsen said in September 2018 that it was working with investment banks J.P. Morgan Chase and Guggenheim Securities, as well as the law firm Wachtell, Lipton, Rosen & Katz, on an "expanded" review of strategic alternatives, including a sale of the company.

Nielsen expects the deal to close in nine to 12 months.

On Thursday, Elliott said it supported Nielsen's decision to split in two.

"Separating into two companies represents the best path forward for Nielsen's business and its shareholders, and we believe it will lead to substantial value creation," Elliott partner Jesse Cohn said in a statement. "By separating into two independent companies, Nielsen is better able to position both its media and retail measurement franchises for long-term success with differential investment, profitability, capital return and strategic frameworks."

Following the separation, Kenny will stay on as chief executive of the Global Media business. Nielsen has started a search for a CEO of the Global Connect business.

Kenny joined Nielsen after serving as the head of IBM's Watson AI platform and portfolio business. He was also formerly chairman and CEO of the Weather Co., a portion of which he sold to IBM. Kenny spent a decade at Bain Capital from 1987 to 1997.

Separately, Nielsen boosted its full-year earnings guidance and reported a loss for the third quarter. The company now expects 2019 earnings of $1.77 to $1.83 a share, up from its previous forecast of $1.70 to $1.80 per share.

Nielsen reported a third-quarter adjusted loss of 51 cents a share on revenue of $1.62 billion.

The company posted a net loss of $472 million, or $1.33 a share, compared with net income of $96 million, or 27 cents a share, in the year-earlier period.

Shares of Nielsen were up 4% in premarket trading Thursday. 

CNBC's Alex Sherman contributed to this report.

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