TNS rejects WPP offer, says prefers GfK

NEW YORK, May 4 (Reuters) - British market research firm Taylor Nelson Sofres TNS.L has rejected an unsolicited proposal from advertising group WPP (WPP.L: Quote, Profile, Research) to buy it for 950 million pounds ($1.87 billion), it said on its Web site on Sunday.

WPP on Saturday offered cash and shares worth 2.30 pounds for each TNS share, 15 pence above the closing price of TNS shares on Friday on the London Stock Exchange.

TNS rejected that offer and said an announcement related to a merger with German market research firm GfK (GFKG.DE: Quote, Profile, Research) would be made "shortly".

The Board of TNS, which was advised by Deutsche Bank and JPMorgan Cazenove, unanimously rejected the WPP proposal, saying it was not in the best interests of shareholders.

"The Board has no hesitation in rejecting this opportunistic proposal as it substantially undervalues the company even on a stand-alone basis," TNS Chairman Donald Brydon said in the statement.

A WPP merger with TNS, best known for measuring companies' ad spending, would have made WPP the world's second-largest market-research company by revenue after Nielsen Co. WPP's ad agencies include Ogilvy & Mather, Young & Rubicam and JWT.

The Board of TNS also said that WPP had previously offered to sell its Kantar unit to TNS in return for TNS shares.

That proposal would have resulted in WPP acquiring control of the group without paying a premium for control, TNS said.

TNS and GfK said last week they were in talks over a nil-premium merger that would create the world's second-largest market information group by revenue with a market value of 1.4 billion pounds ($2.8 billion).