PHILADELPHIA – A Nielsen Holdings shareholder claims that the recent $2.7 billion acquisition of its Global Connect service by Advent International Corporation violates the Securities Exchange Act of 1934.
Marc Waterman filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Jan. 22 versus Nielsen Holdings PLC, Chairman of the Board of Directors James A. Attwood Jr., Chief Executive Officer David Kenny and Board Members Guerrino De Luca, Karen M. Hoguet, Janice Marinelli Mazza, Jonathan Miller, David Rawlinson, Nancy Tellem, Lauren Zalaznick, Thomas H. Castro, Harish Manwani, Robert C. Pozen, and Javier G. Teruel
Nielsen is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide, and is divided into two business units.
Per the suit, Nielsen Global Media provides media and advertising industries with unbiased and reliable metrics that create a shared understanding of the industry required for markets to function – while Nielsen Global Connect provides consumer packaged goods manufacturers and retailers with accurate, actionable information and insights and a complete picture of the complex and changing marketplace that companies need to innovate and grow.
“On Oct. 31, 2020, Nielsen Holdings PLC entered into a stock purchase agreement with affiliates of Advent International Corporation. Under the terms of the SPA, Advent will acquire Nielsen’s Global Connect business through the sale of equity interests of subsidiaries held by Nielsen that operate the Global Connect business for $2.7 billion,” the suit says.
“On Dec. 23, 2020, defendants filed a proxy statement with the U.S. Securities and Exchange Commission (SEC). As alleged, the proxy statement omits material information regarding the transaction, and defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 in connection with the proxy statement.”
The suit went on to explain those alleged violations in the stock purchase agreement.
“The proxy statement fails to disclose material information regarding Nielsen’s financial projections. The disclosure of projected financial information is material because it provides stockholders with a basis to project the future financial performance of a company, and allows stockholders to better understand the financial analyses performed by the company’s financial advisor in support of its fairness opinion,” per the suit.
“The proxy statement fails to disclose material information regarding the financial analyses performed by, J.P. Morgan Securities, LLC, Nielsen’s financial advisor. When a banker’s endorsement of the fairness of a transaction is touted to shareholders, the valuation methods used to arrive at that opinion as well as the key inputs and range of ultimate values generated by those analyses must also be fairly disclosed.”
The suit identified additional alleged problems with the proxy statement.
“The proxy statement omits whether the company entered into any non-disclosure agreements that contained standstill or don’t ask, don’t waive provisions. Without this information, stockholders may have the mistaken belief that, if potentially interested parties wished to come forward with superior offers, they are or were permitted to do so, when in fact they are or were contractually prohibited from doing so,” the suit says.
“The proxy statement fails to disclose material information regarding potential conflicts of interest of JP Morgan. Full disclosure of investment banker compensation and all potential conflicts is required due to the central role played by investment banks in the evaluation, exploration, selection and implementation of strategic alternatives. The proxy statement omits the amount of compensation JP Morgan and its affiliates have received or will receive for the ‘commercial banking affiliate’ serving as ‘an agent bank and a lender under outstanding credit facilities of affiliated entities of Advent.’ If disclosed, the omitted information would significantly alter the total mix of information available to Nielsen’s stockholders.”
For counts of Violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9, the plaintiff is seeking the following reliefs:
• Preliminarily and permanently enjoining defendants and all persons acting in concert with them from consummating the transaction;
• In the event defendants consummate the transaction, rescinding it and setting it aside or awarding rescissory damages;
• Directing the individual defendants to disseminate a proxy statement that does not contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements contained therein not misleading;
• Declaring that defendants violated Sections 14(a) and/or 20(a) of the Exchange Act, as well as Rule 14a-9 promulgated thereunder;
• Awarding plaintiff the costs of this action, including reasonable allowance for attorneys’ and experts’ fees; and
• Granting such other and further relief as this Court may deem just and proper, plus a trial by jury.
The plaintiff is represented by Joshua H. Grabar of Grabar Law Office, in Philadelphia.
The defendants have not yet secured legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-00319
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com