Nielsen Holdings plc (NLSN) on Thursday reported settling with Elliott Management Corp. in a deal that adds a new director to the media measurement data company’s board and creates a committee to oversee the company’s previously announced plan to split into two.
As part of the deal, Nielsen will add Jonathan Miller, who has served senior roles at News Corp. (NWSA), Viacom (VIAC), AOL and NBA Entertainment, to the company’s board. In addition, Nielsen set up an information sharing agreement that will provide Elliott with potentially confidential information as part of the agreement.
“We have had collaborative engagement with @Nielsen the past 2 yrs, and today’s agreement allows us to further this,” Jesse Cohn, Elliott’s star technology equity partner, said in a tweet Thursday.
In addition Nielsen will set up a five-person finance committee, which includes Miller, that will review the separation of the company’s retail sales measurement data focused Global Connect business from its Global Media media analytics operation.
Nielsen announced a plan to split up in November, more than a year after Elliott Management first launched an activist campaign pushing for M&A at the company. The company had conducted a strategic review that considered a sale of the whole business before deciding on a spinoff of part of it.
The activist fund also reported hiking its stake to 13% from 5.1%. The agreement doesn’t provide any details about who identified Miller as a candidate for the board. However, relationship mapping service BoardEx, a sister company of The Deal, found 21 second-degree connections between Miller and Elliott’s Cohn.
In 2015, Miller was installed on the board of New York advertising agency company The Interpublic Group (IPB) in a settlement with Elliott. That agreement and Cohn’s connections both suggest that Miller was chosen by Elliott for the position. Elliott did not return a request for comment.
Lazard reported Thursday that Elliott’s campaign at Nielsen and a new campaign launched by ValueAct’s Jeff Ubben at Nintendo in Japan were the only two new campaigns launched in April at companies with greater than $500 million market capitalizations.
With the Nielsen stake hike, Elliott has deployed $5.6 billion in new activist campaigns in 2020, the most of any activist, Lazard noted. The Paul Singer-run insurgent fund has already settled four campaigns this year at Evergy Inc. (EVRG), Twitter Inc. (TWTR), Peabody Energy Co. (BTU) and now Nielsen.
In 2018, Elliott had sought to engage with the company about a possible sale or engage as a purchaser or investor, according to FactSet.
On Thursday April 30 Nielsen said it continues to make progress towards a separation of its two units but added that it expects the spinoff of Nielsen Global Connect to be concluded in the first quarter of 2021, rather than November 2020 as it had previously expected. The company said that the separation delay was largely due to the “shutdowns of government agencies” necessary to move forward with the separation.
In November, when the company announced the spin off it said it was intended to qualify as tax-free to Nielsen and its shareholders for U.S. federal income tax purposes.
Robert Willens, president of tax and accounting firm Robert Willens LLC, told The Deal that Nielsen is conditioning the spinoff on a favorable ruling from the Internal Revenue Service and the opinion of counsel. He added that the delay may have to do with issues related to the functioning of the IRS during the coronavirus pandemic.
Willens added that even if Nielsen gets a favorable ruling from the IRS it still will need approval from its legal counsel.
In addition, Willens said he didn’t expect that Nielsen will have any trouble getting its spinoff to qualify as tax-free even if the final ruling emerges in a Biden Administration that could look less favorably at tax-free spinoffs.
“The risk is next to zero that there would be a quick change in the law in early 2021,” Willens said. “It is possible that after several years working on the tax code, a Biden Administration could make tax-free spinoffs impossible or more difficult to accomplish. However, with a closing date in the first quarter of 2021 I’m sure this spinoff will qualify as tax free.”
Willens added that Nielsen could sell either of the units after it completes the tax-free spinoff as long as a sale wasn’t agreed to or substantially negotiated during the two years leading up to the completion of the spinoff.
Wachtell Lipton Rosen & Katz partners Steve Rosenbaum, Sabastian Niles and Raaj Narayan advised Nielsen on the settlement.
Nielsen noted in November that J.P. Morgan Securities LLC and Guggenheim Securities LLC were acting as financial advisers to Nielsen in the separation while Wachtell, Baker McKenzie and Clifford Chance LLP served as its legal advisers on the split.
Elliott reported in August 2018 that it had accumulated Nielsen shares that July at prices ranging from $21.41 to $22.41 a share. Nielsen’s shares traded recently at $13.94 a share.
Nielsen’s annual meeting is scheduled for May 12.