Here is why Nielsen shares are up 20%

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Nielsen Holdings Plc (NYSE: NLSN) jumped 20% after agreeing on a sale of the company to a consortium of private-equity companies.  After negotiations broke down last week, fresh talks resurrected, valuing the media measurement firm at $16 billion-plus debt.

On Tuesday, Nielsen said that a group led by Elliott Management Corp.’s private-equity division and Brookfield Asset Management Inc. agreed to pay $28 per Nielsen share.  According to Wall Street Journal, the two parties were on the verge of reaching an agreement. 

WindAcre Partnership opposed the sale of Nielsen

The company had been in active discussions with private equity firms about going private in an agreement worth $25.40 per share.  Nielsen, on the other hand, rejected the offer last Sunday. The Houston-based investment firm, WindAcre Partnership LLC, with an approximately 10% interest in the company and an extra 14 percent via swaps, told management it would acquire a large stake to thwart the purchase if it went through.

Nielsen informed WindAcre of the proposed deal beforehand, but the investment firm is yet to demonstrate if it endorses it, according to people familiar with the situation.  WindAcre did not respond to requests for comment on Tuesday.

The new agreement price is roughly 60% higher than Nielsen’s stock price before The Wall Street Journal disclosed an agreement was in the pipeline at the beginning of March.  Nielsen’s stock shot up afterward and remained high even after the discussions broke down.  On Monday, the shares closed at $22.2.

The transaction is fully funded and contains a 45-day “go-shop” duration during which Nielsen can solicit bids from other buyers.

Nielsen’s grip slipping with the expansion of streaming

Nielsen quantifies TV ratings in the United States, which offer audience projections that networks utilize to sell advertising time and convince advertisers that they are getting service for their pay. However, its grip is slipping as streaming gains traction and conventional broadcast television TV lose viewers.  Whereas the New York-based firm has launched streaming measurements in recent years, it is just among the many players in that space.

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