Taylor Nelson Sofres' (TNS) £2.1 billion all-share merger with Germany's GfK could be restructured to give the UK market research group's investors a cash sweetener but may result in management control passing to the German group.

It is hoped the scheme, which has not yet been made public, would see off a higher bid for TNS from WPP, the UK advertising giant led by Sir Martin Sorrell.

The deal would also satisfy TNS shareholders, who would rather receive cash than paper in what would be the world’s second-largest market research group.

WPP has made two offers for TNS but both were below this morning's 256.5p share price. The UK advertising group was today given the right to access TNS's books as it considers making a new offer, which analysts believe could reach between 280p and 300p a share.

Under the alternative deal, TNS would borrow to pay a large special dividend to its investors. It is unclear how much TNS could afford to pay but it has gearing capacity.

TNS's net debt was £353.6 million at December 31, 2007, 2.5 times last year's underlying earnings.

Raising this to four times earnings would allow TNS to pay a further £200 million cash, taking its borrowings to £560 million, representing 48p per TNS share.

Once the merger was completed, TNS-GfK's combined debt would reach £900 million, 3.3 times the enlarged group's 2007 underlying profits. The multiple would fall as savings were achieved, although it is unclear if it would be acceptable to investors.

The 50-50 merger terms would remain unchanged but, as a price for joining forces with a debt-laden TNS, GfK is likely to demand that its management, led by Klaus Wubbenhort, would run the enlarged company and its headquarters would be in Nuremberg.

Under the present deal, TNS-GfK would be run by David Lowden, chief executive at TNS and be based in London.

TNS is making a nil-premium offer for GfK shares in a deal that the two companies said would generate £76 million in annual savings by 2011.

Last week, Sir Martin refused to buy a block of shares in TNS from TCS, a hedge fund that holds 3 per cent of the group, at about 255p. Had he done so, WPP would have been bound to pay at least that price in a full bid, although his refusal to do so was widely interpreted as a negotiating tactic.

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