''Knowledge is power'', said Sir Francis Bacon 400 year ago, and the current multi-billion dollar tussle over British market research group Taylor Nelson Sofres plc (TNS) is ample testimony to the truth of the statement even today. Advertising giant WPP is locked in a bitter battle with German market research group GfK Holding AG for a combination with TNS, either of which would create one of the largest such firms in the world.

However, in this fight, Sir Martin Sorrel-led WPP finds itself in a minority, for in a show of German-British unity, TNS has rejected a higher WPP offer for its business in favour of friendly deal with GfK. Sorrel hasn't take this slight lightly and has threatened to go hostile with his offer, hopping to influence shareholders to pressurise TNS management into dealing with him.

In two latest developments on this front, supervisory board of GfK-Verein, the majority owner of GfK Holding, approved plans yesterday to merge GfK Holding with TNS, while the latter rejected WPP's third offer a day before.

GfK AG supervisory board chairman Hajo Riesenbeck said the administrative board has signalled its 'unambiguous support for the merger with TNS, paving the way for this unique merger'.

The full membership of GfK-Verein, which holds around 57 per cent of the company, is set to vote on the deal on 21 July as the board wants to win the support of members though this is not legally necessary following the board's approval.

'Although the articles of association of the GfK Verein do not stipulate that voting by the members is mandatory, the GfK management board and supervisory board, as well as the administrative board of the GfK Verein deem it important to have the support of the members,' the statement said.

GfK Verein managing director Raimund Wildner was quoted in the same statement as saying he is 'confident that the vote of the members of the Verein will also be positive'. A successful merger will create the second-largest market research firm after AC Nielsen with a value of around $4 billion.
On Thursday, the TNS board rejected WPP's proposal of 0.1889 WPP shares and 173p per TNS share, saying it "substantially undervalues" the business.

The offer was made hot on the heels of a Takeover Panel "put up or shut up" order issued on Wednesday that gives WPP one week to make a clear statement of its intentions. WPP's approach, which values TNS at £1.08 billion ($2.14 billion), is only a proposal, and therefore not the firm offer required by the panel.
Donald Bryden, the TNS chairman, says that WPP is simply trying to scupper the GfK deal. "Sir Martin keeps making what a bridge player might call 'weak bids' and it is not clear that he actually wants to win the hand," Bryden said.

"He is trying to screw up the merger because that would create a market leader that could damage its business." If it was serious, there would be a higher, formal offer, according to Bryden. "This is just mood music."

However, Sir Martin wasn't willing to give up quite so easily. "We are testing this with the company's shareholders because the board is unwilling to engage – and things are going as well as we could expect," he said. "The language from the board was unnecessarily strong but we won't let their emotion spoil the reality."

TNS closed up 8 per cent at 243p. WPP closed up 3.5p at 464p, valuing its approach at 260.5p per TNS share.

Taylor Nelson Sofres (TNS) is the world's third largest market research and market information group. TNS says its strategic goal is ''to be recognised as the global leader in delivering value-added information and insights that help our clients make more effective business decisions.''

The company is headquartered in London, with 15,000 employees in more than 80 countries, across Africa, the Americas, Asia Pacific, Europe and the Middle East. In 2006, TNS had global sales of over £1.02 billion. The company is also listed on the London Stock Exchange.

The GfK AG, established in 1934 as the GfK-Nürnberg Gesellschaft für Konsumforschung e.V. is Germany's largest market research institute, located in Nuremberg, and the fifth largest such organization in the world, after Nielsen Company, Taylor Nelson Sofres, IMS Health, and the Kantar Group.

It was founded in 1934 by an association of university teachers, among them Ludwig Erhard, later minister of economics and chancellor of Germany. The institute is probably best known for its measurement of German TV audience ratings, which it has carried out since 1991, but it has long since expanded into other countries and into all fields of marketing research.

WPP Group plc, based in London, UK is the world's largest communications services group (and one of the big six advertising holding companies, the others being Omnicom, Interpublic, Publicis, Dentsu and Havas) employing 100,000 people working in more than 2,000 offices in 106 countries.

Its self-conceived characterisation is a "parent company," able to bring together the right combination of capabilities to serve a client's analytic and creative brand marketing needs.