Twist in takeover battle for M&C Saatchi: support for $549m bid withdrawn
The takeover saga of M&C Saatchi has encountered a dramatic turn, after support for a £310m (A$549 million) takeover bid from digital marketing group Next Fifteen was withdrawn.
Last month, the British advertising group agreed to a deal to be purchased by Next Fifteen, after the group rejected a fourth bid last week from the top shareholder, Vin Murria. Had the takeover gone through, it would’ve ended almost three decades of independent ownership of the agency, which was founded by brothers Maurice and Charles Saatchi in 1995.
M&C Saatchi’s withdrawal of support came down to the agency no longer regarding the terms as “fair and reasonable” amid pressure from alternate bidder, Vin Murria.
The independent agency said the reason behind the withdrawal of its support was the decline in the value of Next Fifteen’s shares, which have fallen 28% since the deal was announced in late May.
As directors of M&C Saatchi issue recommendations to shareholders ahead of votes on two bids for the company, rejection of the Next Fifteen offer is encouraged because of its declining share price. Overall, however, the Next Fifteen offer is preferred over that of rival ADV, which was deemed less desirable for takeover from a strategic, commercial, employee and cultural point of view.
British entrepreneur Vin Murria was extolled from the agency’s board, with M&C stating it was “not appropriate” to keep Murria as a deputy chairwoman considering her attempts for takeover. The removal of Murria from the board came after rejecting four of her bidding offers, which asked M&C to clarify its analysis of the financial terms of the competing bids.
The new statement released by M&C Saatchi said: “Based solely on financial terms, the M&C Saatchi Directors consider each of the ADV Offer and Next Fifteen Offer to be inferior to M&C Saatchi’s standalone prospects,” but added, “however, if those standalone prospects were incapable of being delivered as envisaged, then the M&C Saatchi directors consider the Next 15 Offer to be superior to the ADV Offer and Next Fifteen to be the preferred future owner of the M&C Saatchi business.” This is based on the perceived “strategic, commercial, employee and cultural advantages” of the Next Fifteen offer.
Next Fifteen continues to encourage shareholders to accept its bid, noting that its fallen share price reflects inevitable and ubiquitous results seen across most competitors in the sector.
Have your say