Neilsen £1.75 bn cash call will test the markets

Will investors have an appetite for Neilsen shares once the giant Dutch market research group, reveals the details of its planned $1.75 billion cash-raising exercise in New York?

WPP's Sir Martin Sorrell has always pointed to the higher growth and margins that market research has enjoyed in the last decade compared with other marketing services disciplines, in particular advertising, so the market reaction will be good indicator of how the markets rate prospects for the advertising and marketing business.

Neilsen, formerly VNU, was bought up for £10 billion in 2006 by a private equity consortium including Blackstone, Carlyle and KKR. It recently sold its trade magazine business and now wants to pay down some of its $8.6 billion worth of debt.

With a nine per cent rise in first quarter revenue now should be the time to raise cash, but the market slump in May and continuing uncertainty over the Eurozone debt crisis has led 20 companies to cancel or postpone their IPOs.

Maybe investors will have confidence that Neilsen will be one of the leaders of the recovery.

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About David O'Reilly

David is a former deputy editor of Campaign and writer for a number of leading titles including Management Today and the Sunday Times. He is a partner in The Editorial Partnership.