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VNU's strategy derailed by active investors

Author: Haspeslagh, Philippe ; Bergeron, Sylvie ; Brodie-Smith, JustinINSEAD Area: StrategyPublisher: Fontainebleau : INSEAD, 2007.Language: EnglishDescription: 24 p.Type of document: INSEAD CaseNote: Latest version available via https://publishing.insead.eduAbstract: The case focuses on the Nielsen Company, formerly known as VNU, facing investor opposition to its acquisition of IMS Health for €5.8 billion. It first describes the history of VNU and strategy of its CEO, 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 Kholberg Kravis Roberts and Blackstone, is considering taking VNU private… The Board is considering its position carefully.Pedagogical Objectives: The purpose of the case is to illustrate the dilemma facing 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-à-vis investors. How supportive can they be of management plans when these face a shareholder challenge? To what extent are these investors purely event driven or to what extent do their arguments hold merit? How to navigate in an environment where these hedge funds and other active owners have become a powerful reality?
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Latest version available via <a href=https://publishing.insead.edu>https://publishing.insead.edu</a>

The case focuses on the Nielsen Company, formerly known as VNU, facing investor opposition to its acquisition of IMS Health for €5.8 billion. It first describes the history of VNU and strategy of its CEO, 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 Kholberg Kravis Roberts and Blackstone, is considering taking VNU private… The Board is considering its position carefully.

The purpose of the case is to illustrate the dilemma facing 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-à-vis investors. How supportive can they be of management plans when these face a shareholder challenge? To what extent are these investors purely event driven or to what extent do their arguments hold merit? How to navigate in an environment where these hedge funds and other active owners have become a powerful reality?

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