Cedar Rock Capital, the largest shareholder in Taylor Nelson Sofres (TNS) with 9.4 per cent, is understood to have rejected WPP’s £1.1 billion hostile offer for the British market researcher, The Times has learnt.

The decision by Cedar Rock, a British fund manager, comes despite confirmation from GfK, the German market research group, that it would not be making a bid for TNS. This followed a breakdown of talks with its private equity backer Apax Partners, leaving WPP as the only remaining bidder.

David Lowden, chief executive of market research group TNS, is meeting industry rivals and private equity groups in a last-ditch attempt to find a bidder to compete with WPP’s offer.

“We are knocking on doors to see if there is interest in TNS and we must continue to pursue that,” Mr Lowden told The Times, acknowledging that it would be difficult in the current turbulent market.

A large number of TNS shareholders, particularly hedge funds, are expected to vote in favour of WPP’s hostile offer. Many are concerned that TNS shares will plummet in the event of WPP’s withdrawal.

Cedar Rock, however, is understood to want a higher offer and a greater proportion of cash to shares from WPP. TNS shares yesterday closed down 1.75p at 267p.

Mr Lowden is understood to have met rivals, including AC Nielsen and private equity groups, although he has yet to find an interested party. He said he will begin a roadshow today, in which he will tell shareholders to hold out for a higher offer from WPP, the world's second-largest advertising group run by Sir Martin Sorrell.

Mr Lowden added that TNS had no plan to table a bid for GfK, citing the dominant role of the German group’s majority shareholder GfK Verein. “GfK Verein is a 58 per cent shareholder and has very strong views on how GfK should be run,” he said.

GfK said in a statement that it had “concluded that the terms of the financing available did not enable a sufficiently compelling alternative cash offer to be made for TNS that was also economically in the best interests of the GfK shareholders”.

TNS took the opportunity to reiterate its recommendation to shareholders to reject WPP's offer, arguing that it undervalued the company.

Mr Lowden added that he was concerned for the future of TNS if it found itself in WPP’s hands. “If [Sir Martin] Sorrell does not seek to engage the management, it could be detrimental to the future success of TNS. TNS is a people business and that is what makes it successful,” he said.

GfK is precluded from bidding again for TNS for six months, unless there is a material change of circumstances or it reaches agreement with the TNS board.

WPP dashed an agreed nil-premium merger between GfK and TNS last month with a higher hostile bid made up of cash and shares. The Times revealed then that GfK was considering tabling a cash bid for TNS, a move that the German company confirmed.

Sir Martin said that he believed GfK would not be able to raise the funds for a bid in current market conditions and said last week that the Takeover Panel should force GfK to clarify the status of its potential bid.

The final acceptance date for WPP’s offer is this Friday.

TNS published its interim results yesterday, saying pre-tax profits were down £2.9 million at £31 million in the six months to June, although income was depressed by £8.4 million because of the fees charged by advisers working on the deal.

On an adjusted basis, with one-off items stripped out, operating profit was19.6 per cent ahead at £54.3 million, with revenues 5 per cent better on an underlying basis at £580.4 million.

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