VNU's management has recommended that shareholders accept the offer, but several large stakeholders, including Fidelity International, have said that they will not accept any buyout offer at that price because it undervalues the company.

VNU began talking with interested buyers after it failed to convince shareholders Fidelity, Templeton Global Advisors and Knight Vinke -- which together control 40 percent -- of the merits of buying U.S. healthcare data firm IMS Health last year.

The offer is conditional on 95 percent approval and will be discussed on April 18 at the annual shareholders meeting. But Valcon can waive the 95 percent clause if less than 60 percent of shares are tendered and complete its purchase, according to the offer memorandum.

VNU said on March 8 it had considered selling the company in parts, which some investors still believe is the best option, but that it found no takers and that it would lose hundreds of millions of euros in tax benefits.

VNU reiterated in a letter to its shareholders, included in the memorandum, that no buyers were interested in its Media Measurement and Information unit or its Marketing Information division.

It said the price offered by the consortium was fair and cited two opinions written by VNU's financial advisers, investment banks Credit Suisse and Rothschild.

Credit Suisse values the firm at 29.60 euros per share on a stand-alone basis and between 25.90 and 29.35 euros in the case of a break-up. Rothschild sees a sum-of-the-parts valuation in a range of 26 to 29.50 euros and a range of 29.90 to 35.80 euros per share if VNU stays independent and restructures its units.

"The offer price exceeded both the high end of the range of the break-up private market analysis provided by NM Rothschild and the midpoint of the sum of the parts break-up analysis provided by Credit Suisse," VNU said.

HOLDOUTS

However, Fidelity, which owns around 15 percent of VNU, and Knight Vinke, have said they would not support the consortium's offer at the proposed price.

Analysts say it is unlikely that shareholders will be persuaded to support the bid.

"The fairness opinion, in which Rothschild arrives at a value of 35.80 euros, will raise questions to what extent the 28.75 euro bid is fair," Sander van Oort at F. van Lanschot Bankiers said.

"We believe an increasing proportion of shareholders will not tender their shares," he said, adding that a management crisis may emerge.

Chief Financial Officer Rob Ruijter said last week that some board members were prepared to resign if a buyout offer for the market research company was rejected by its shareholders.

The company is already searching for a new chief executive after shareholders rebelled against plans to buy healthcare data provider IMS Health for $7 billion last year, triggering the resignation of CEO Rob van den Bergh.

Van den Bergh joined VNU in 1980 and was named CEO in 2000.

VNU's share price has more than halved since 2000 and was up 0.5 percent at 26.96 euros by 0844 GMT on Monday. The DJ Stoxx European media index was unchanged.

VNU, based in the Dutch city of Haarlem, has transformed itself over the last 40 years from a small Dutch newspaper and magazine publisher into a U.S.-focused business information company that mainly sells data about consumer habits.

Sherry Cooper, chief economist at BMO Nesbitt Burns, said the ramifications of $70 oil and $3-a-gallon gasoline would be "more mild" the second time around "because we're getting kind of used to it."

But while the gas-price sticker shock may be wearing off, Nomura Securities chief economist David Resler fears a more subtle fuel-related angst settling in among consumers.

"There is the pessimistic notion that this is not going to go away and that's going to have a more lasting impact on driving habits and behavior, I suspect, than we've seen so far," Resler said.

In that context, a hypothetical supply disruption that jolts oil prices to $80 or higher and keeps them there for an extended period - say, three months - could result in "a substantial falloff in discretionary spending" that snowballs into a serious slowdown.

Perhaps the top threat for the oil market is the standoff between the United Nations and Iran, OPEC's No. 2 producer, over Tehran's nuclear energy ambitions. Iran's foreign minister said Friday his country would not use oil as an economic weapon, and that helped ease prices, but analysts say they remain concerned about supplies from
Iraq, Russia, Venezuela and other places.

Unrest in Nigeria has taken more than 500,000 barrels per day of oil off the market, and more than 300,000 barrels per day of Gulf of Mexico output remains shut-in because of damage from last fall's hurricanes.

With global oil demand expected to average 85 million barrels per day in 2006, and excess production capacity limited to 2 million barrels per day, oil analyst Jamal Qureshi of PFC Energy in Washington said prices aren't likely to retreat anytime soon.

"The market is awakening to the scope of the risks," said Antoine Halff, director of global energy Fimat USA in New York.

Yet in spite of all the apprehension about oil supplies - or maybe because of it - U.S. inventories of crude are at a seven-year high of roughly 341 million barrels. That does not include the 685 million barrels in the country's strategic reserve, available in an emergency.

Some analysts point to this buildup of inventories as evidence the market is divorced from reality. IFR Energy Services' Tim Evans sees a "dangerous complacency about the downside potential for prices" - but many more say it is a reflection of unease about geopolitical uncertainties.

On Friday, light crude for May delivery settled at $66.63 a barrel, down 52 cents on the New York Mercantile Exchange. U.S. retail gasoline prices averaged $2.53 a gallon, or 37 cents higher than last year, according to Oil Price Information Service.

The potential exists for $3-a-gallon gasoline at some point this summer, analysts say, but that assumes out-of-the-ordinary disruptions to refining or distribution, or both. The Energy Department, meanwhile, is forecasting an average summertime price of $2.50.

Economists and oil-market experts say industry and homeowners may not like paying more for fuel but they are adapting, in large part because energy is a tiny piece of overall spending and, thanks to more efficient technology, an even smaller piece than it was during the energy crises of the 1970s.

The burden is most severe on low-income families and fuel-intensive businesses, though truckers, chemical manufacturers and, to a lesser extent, airlines have had success in passing along these costs.

Relatively low interest rates, which have made it easy to borrow money while helping to prop up the stock and housing markets, have reduced the impact of high oil prices on the economy.

Of course, the Federal Reserve has raised short-term rates 15 times since June 2004 to cool off the housing market and keep inflation in check, and this is likely to slow growth irrespective of energy prices.

BMO's Cooper said the Fed probably needs to raise interest rates again in May to slow economic growth because there are signs - rising airfares among them - that inflationary pressures are creeping up.

Brian Hicks, co-manager of US Global Investors' Global Resources Fund, a mutual fund heavily invested in energy, said a recession in the U.S. would likely reverberate across emerging-market economies and could quickly depress daily oil demand by 2 million barrels per day.

That dire scenario is not what Hicks or most other financial professionals are anticipating. Hicks forsees oil prices trading in a range of $55 to $65 through the end of the year, with consumption tapering off anywhere above $70 and the Organization of Petroleum Exporting Countries curtailing production at around $50.

James Cordier, president of Liberty Trading in Tampa, Fla., believes oil prices will climb as long as the economies of the U.S., China and India continue to grow and that prices may need to hit $75 before there is any significant demand response.

"We are going to find out at what price level we start rationing demand," Cordier said. "That is what we have to do."

The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.

According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.

A $50-a-barrel lock-in would open the way for Venezuela, already the world's fifth-largest oil exporter, to demand a huge increase in its official oil reserves - allowing it to demand a big increase in its production allowance within Opec.

Venezuela's oil minister Raphael Ramirez told Newsnight in a separate interview that his country plans to ask Opec to formally recognise the uprating of its reserves to 312bn barrels (compared to Saudi Arabia's 262bn) when Mr Chávez hosts a gathering of Opec delegates in Caracas next month.

Venezuela's ambitious strategy to boost its standing in the global pecking order of oil producers by increasing the extent of its officially recognised reserves is likely to face opposition. Some countries will oppose the idea of a fixed price for the global oil market at well below existing levels. Others are unlikely to be happy with any diminution of their influence over world oil prices in favour of Venezuela.

Caracas's hopes for an increase in its standing would be a far cry from the days when Mr Chávez came to power after years of quota-busting during which Venezuela helped to keep oil prices down. "Seven years ago Venezuela was a US oil colony," said Mr Chávez.

As he seeks to bolster his country's standing on the world stage, the Venezuelan president has also introduced radical changes to the domestic oil industry. Last Friday his government announced that 17 oil companies had agreed to changes which will see 32 operating agreements become 30 joint ventures that will give the government greater say over the country's oil industry.

The original deals were signed in the 1990s as part of a drive to attract more investment into the country's oil industry. However Mr Chávez said the deals gave foreign companies too much and the government too little. Under the new arrangements state-run Petroleos de Venezuela will hold 60% of the joint ventures. "Now we are associates and this commits us to much more ... it's no longer a contract for doing a service, it's a strategic alliance," Mr Chávez told the companies that signed up.

The new arrangements were not universally welcomed by the oil companies. Exxon Mobil and the Italian energy company Eni have refused to sign up to the new arrangements.

Mr Chávez, a former paratrooper who has survived several attempts to oust him and who faces re-election in December, regards Venezuela's oil revenues as crucial to his plans to fight poverty. Critics accuse him of squandering the country's oil wealth on improvised social programmes.

The Venezuelan president used the Newsnight interview to attack the role of the International Monetary Fund in Latin America, where it has a reputation for pushing market-based reforms as the price of its help to countries struggling with their finances.

The Chávez government has helped a number of countries, including buying Argentinian and Ecuadorean bonds, with Mr Chávez arguing that he would like to see the IMF replaced by an International Humanitarian Fund.

Hugo Chávez was born in 1954. The former paratroop colonel first came to prominence after a failed coup in 1992, for which he was jailed for two years. He was elected president of Venezuela in 1998, launching a social programme known as Bolivarianism, after the revolutionary Simón Bolívar, and reversing planned privatisations. In 2002 he survived a coup attempt and, two years later, a bid to unseat him in a referendum. He has close links with Cuba's Fidel Castro and has frequently clashed with the United States.

The development agency has not had a Iraq office since an August 19, 2003, bombing at U.N. headquarters in Iraq killed a bank employee. A consultant, with a staff of seven Iraqis, is paid by the World Bank looks after its affairs in Iraq.

No World Bank staff would be forced to accept an Iraq assignment, the officials said.

In recent weeks, Wolfowitz sent a fact-finding mission to Iraq, and he was now examining security matters and several reconstruction-related issues, officials said.

The possibility of a new World Bank office revives attention to Wolfowitz's role as an architect of the Iraq war. Many critics have accused the Bush administration and the Pentagon in particular of failing to plan for a post-invasion Iraq, as violence rages three years after Saddam Hussein's ouster.

Michael O'Hanlon, a reconstruction expert at Washington's Brookings Institute, said Wolfowitz's history with Iraq "complicates everything."

"He is a very smart man," O'Hanlon said, "but he is also obviously very controversial in his basic support of the Iraq invasion."

Wolfowitz's predecessor as World Bank president, Jim Wolfensohn, resisted pressure from U.S. lawmakers to return bank reconstruction experts to Iraq after the 2003 bombing.



Since the attack, the World Bank has operated from an office in neighboring Amman, Jordan. However, Iraqi officials have complained about the burden of traveling to Amman to consult with the World Bank. In December, Barham Salah, a Kurdish leader, wrote to Wolfowitz urging the bank's full engagement in rebuilding.

"Reconstruction is an important part of the World Bank's mission -- from Bosnia and Afghanistan to Liberia and Iraq," a senior World Bank official told Reuters. "The objectivity the World Bank brings is greatly valued by donors from around the world, as well as host governments."

U.N. representatives recently met Wolfowitz and urged the bank to help with Iraq's major problems of financial management and civil-service reform.

"There has been a need for the bank to be in Iraq," said James Dobbins, director of the International Security and Defense Policy Center at Rand Corp.. He said, however, the violence in Iraq could limit bank activities.

Other analysts note that the U.S. State Department is winding down its $20 billion Iraq reconstruction program, which focused on large electricity and water projects that have failed to deliver desired results.

O'Hanlon said the bank could offer a "fresh set of eyes," act as an independent broker and generate much-needed employment for Iraqis.

Experts estimate the cost of resuming an expatriate mission in Baghdad at around $1 million a year. "It's not too soon to go into Iraq, but the security issue is extremely serious," a bank official working on reconstruction projects noted.

Others note that if the World Bank expands its presence in Iraq, more international agencies and donor countries would be encouraged to follow.

"This is an industry where size and scale matter," Patricia Russo, who will be chief executive of the new group, said on a conference call.

The Alcatel/Lucent tie-up had been partly complicated by Alcatel's plans to increase its stake in French defense electronics group Thales -- a politically sensitive issue that has involved the German and French governments.

Alcatel said it would continue talks with Thales over possibly increasing its shareholding in the group. Alcatel now has a stake of around 9.5 percent in Thales, while the French government holds around 30 percent of Thales.

Alcatel and Lucent said the deal was a "merger of equals."

However, Alcatel shareholders will own around 60 percent of the new company, with Lucent shareholders owning the rest.

NEGOTIATING POWER

As part of the deal, Lucent shareholders will receive 0.1952 of an ADS (American Depositary Share) representing ordinary shares of Alcatel for every common share of Lucent that they currently hold.

This values Alcatel's takeover of Lucent at around $13.4 billion.

Alcatel Chairman and Chief Executive Serge Tchuruk will be non-executive chairman of the new Paris-headquartered company.

A tie-up between Alcatel and Lucent strengthens the ability of both companies to negotiate prices with their telephone company customers, who have led consolidation in the telecoms sector.

Alcatel said it expected its acquisition of Lucent to be accretive to earnings per share (EPS) in the first year.

The transaction terms were thrashed out with the backdrop of a complex battle for French company Thales.

Alcatel said it remained keen on increasing its stake in Thales.

Defense industry sources have said Alcatel hopes to fold its satellite activities into Thales in exchange for a bigger stake in the company. However, European planemaker EADS is also keen for a stake in Thales.

EADS tried to grab control of Thales in 2004 and media reports said French President Jacques Chirac and German Chancellor Angela Merkel backed a three-way deal between EADS, Thales and Alcatel to create a leading European satellite firm.

Lucent said it would create a separate and independent unit to oversee its sensitive contracts with the US government.

Retired workers of Lucent had said that the U.S. government should not approve of the deal with Alcatel, but Lucent said the merger was not contingent on their approval.

Alcatel shares closed down 1.5 percent at 12.77 euros on Friday, while Lucent ended down 1.3 percent at $3.05.

Presented as a merger of equals, the operation is in effect an Alcatel takeover of Lucent. The French firm will have 60 percent of the capital in the new group which will have its headquarters in France.

But the two companies also said in their statement that they will have the same number of seats on the new company board, and Lucent's chief executive officer Patricia Russo will take up the same post in the new entity.

The move to take Lucent's defence activities out of the merger comes amid rising protectionist sentiment in Congress over US enterprises linked to national security.

"We intend to form a separate, independent US subsidiary holding certain contracts with US government agencies," Russo told a press conference.

"This subsidiary would be separately managed by a board, to be composed of three US citizens who will be acceptable to the US government.

"This is a structure which is routinely used to protect certain government programmes in the course of mergers that involve a non-US parties," she added.

The activities are concentrated at Lucent's Bell Laboratories, the oldest American electronics research centre, which was set up in 1925.

Bell Labs will keep its headquarters in Murray Hill, New Jersey, also the site of the current Lucent head office, said Alcatel chairman and chief executive Serge Tchuruk.

Bell Labs carried out the first long distance transmission of a television programme in 1927 and aims to register at least two copyrights a day from its inventions.

The unit recently won an 11 million dollar contract from the US government to create a broadband communications network for the military.

Setting up the new entity around Bell Labs should mean the Lucent-Alcatel merger will get the green light from the US competition authorities -- and calm any criticism of the deal from Congress.

A law being considered by Congress would ban foreign government-controlled firms from taking stakes in US firms with activities in the US defence sector, unless those interests are put into separate US-controlled entities.

The law follows a major controversy after Dubai Ports World, which is controlled by the United Arab Emirates government, took over a British firm that manages terminal operations at six major US ports.

Alcatel's links with French defence equipment maker Thales could cause problems with the US authorities. Alcatel has a 9.5 percent stake in Thales, and the French state has 31.5 percent.

Thales is a major player in the European defence industry, with interests in systems for combat planes, warships and computer security.

Certain parts of the US media have recently been critical of the French government's opposition to moves to liberalise the European Union economy.

"It should make the intolerable delays a thing of the past," said Joseph Schwieterman, a transportation expert and economics professor at DePaul University.

Still, some aviation analysts question how quickly the plan will bring relief and whether it can live up to its billing when completed in 2013. Questions also loom over the project's financing, which relies partly on a shrinking pool of federal money and airlines that have been bleeding red ink for years.

And the project faces a fierce legal challenge by residents of two adjacent suburbs, where hundreds of homes and business are slated for removal and 1,300 graves are to be relocated.

"I can't imagine anything more sacrilegious than rolling pavement over pre-Civil War graves," said Bob Sell, a spokesman for St. Johannes Cemetery, where dozens of his relatives are buried.

Much of O'Hare's problem can be traced to its pretzel-like runway configuration, a remnant of its origin as a military airfield during the 1940s. The intersecting layout makes it tough to land planes in Chicago's frequent fog and wind.

"That airfield has probably the most complex geometry of any airfield in the United States ... and possibly the planet," said Mary Rose Loney, a Miami aviation consultant who was Chicago's aviation commissioner in the late 1990s.

Even in fair weather, the airport can be trouble. Since March 21, the Federal Aviation Administration has investigated three close calls on O'Hare's intersecting runways. In one, planes came within 100 feet of each other - the most serious near-crash on a U.S. runway in several years, the FAA said.

When visibility drops or wind gusts, air traffic controllers close one of the three arrival runways to eliminate the risk of collisions. The ensuing bottleneck means planeloads of passengers must wait on the ground in other cities for Chicago's weather to clear.

"O'Hare is so centrally located and has so much traffic that when things get out of whack, the whole system can be impeded very quickly," said Darryl Jenkins, a consultant to numerous airlines.

It's a phenomenon seen firsthand by Wayne Carpenter, a 37-year-old private-equity fund manager who has been flying out of O'Hare weekly since 1991.

"I avoid O'Hare at all costs when I'm flying across the country," he said. "It just seems like I don't see these kinds of delays anywhere else."

O'Hare ranked dead last in on-time performance among the busiest U.S. airports in 2004 - prompting the FAA to cap the number of landings there last year at 88 arrivals an hour between 7 a.m. and 8 p.m., down from more than 120. That helped O'Hare's on-time performance a little, but it's only a temporary fix.

Work under way on the expansion's first phase is expected to cut delays by about two-thirds. The first step is a new runway on the airfield's northern edge that will keep three arrival runways open in bad weather. It's due to open at the end of 2008.

The project to untangle O'Hare will create a mostly parallel layout, rather than a crisscrossing tangle. The net result will be just one additional runway - eight instead of seven - but will greatly ease flight operations, planners say.

A new terminal and western access to the airport also are planned.

FAA officials say parallel runways are the ideal design. They point to the success of Dallas Fort-Worth and Denver airports, for example, which have the same number of runways as O'Hare but boast far better performance.

The average delay per aircraft at Dallas, for example, is about 10 minutes. At O'Hare, the average was approaching 20 minutes before limits in 2004, according to the FAA. O'Hare's expansion promises to chop that figure to 5 minutes.

But in the meantime, critics still have questions.

"Do you really have to tear up a lot of runways or do as grandiose a plan as is in play? I'm not sure you do," said Aaron Gellman, a professor at Northwestern University's Transportation Center.

Gellman says improvements to the region's air traffic control system, for example, could go a long way toward increasing O'Hare's capacity.

The project's well-organized, well-financed foes also argue the project will drive up prices for travelers and will not reduce delays because increased capacity will be absorbed with more flights.

"Be prepared for delays the likes of which you've never seen before, and be prepared to pay a whole lot more for your airline ticket," says Joe Karaganis, an attorney for the suburbs and cemetery.

"We live at a time where there is a constant attempt to set some people against others. That is not my idea of politics and I refuse to get involved in this kind of game," he said.

"There is misunderstanding and incomprehension about the direction of my action. I profoundly regret it," he said.

He also said he did not feel he had been disavowed by French President Jacques Chirac and he was not "a man to give up".

On Friday Chirac signed the law and offered later two key modifications to the law: reducing a trial period from two years to one and requiring employers to provide an explanation in case of firing.

But the law was published Sunday in the Official Journal before it had any modified version.

French trade unions and student organizations rejected a compromise offered by Chirac and called for another round of national strikes and demonstrations for Tuesday.

The CPE law is aimed at reducing a high youth unemployment rate,which reaches as much as 23 percent among youths and up to 50 percent in some poor, heavily immigrant areas.

But opponents said it will erode hard-won labour rights and make it more difficult for youths to find long-term jobs and criticized that maneuver as "surrealistic" and "undemocratic".