Sorrell and Brydon ramp up the stakes

Takeover battles have become scarce since the credit crunch gave businesses other things to worry about and robbed the private equity industry of the cheap and abundant finance it needs.

This on its own would explain why the proposed tie-up between two market research organisations Taylor Nelson Sofres (TNS) and its German counterpart GfK might arouse interest.

But the real reason it has captured headlines out of all proportion to the size of the deal is the arrival on the scene of Sir Martin Sorrell, the chief executive of the worldwide advertising and marketing group WPP.

Sorrel would like TNS for himself if he could get it at the right price. But because he is loathe to overpay he does not want to get sucked into an auction, so his opening gambit is a clever campaign to undermine the credibility of the Anglo-German proposal.

Thus he has pointed out that, built as a merger, the proposed deal looks very much like a German takeover. He also cast doubts on the ability of the board to deliver the savings it has promised and which are used to justify the deal. And he is deeply sceptical about the ability of the combined group to raise its margins to the level it is claiming.

Quite a few people would fold before such an onslaught, but on this occasion he has a worthy opponent in Donald Brydon, the chairman of TNS and a man well versed in battles such as these, having been on the board of Scottish Power and Allied Domecq when they were both taken over.

Brydon too has been bending ears in the journalistic community to stress the merits of the German deal and to sow rival seeds of doubt about Sorrell's track record in market research.

It is a long time since two senior people became so personally involved in a bid battle. What is interesting is that the outcome is likely to be influenced by the personal standing and track records of the two men, rather than the merits of the opposing deals.

This is because the merits are very hard to assess - it is impossible even to put a value on the German option because it depends on whether the cost savings can be delivered in full and on time, which no one can possibly know. So it comes down to which you trust more to deliver - a battle neither man will want to lose.

Anthony Hilton is City commentator on London's Evening Standard

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