- Oops!Something went wrong.Please try again later.
(Reuters) -British advertising group M&C Saatchi withdrew its support for consultancy Next Fifteen's $381 million takeover on Friday due to guidance from its advisers after the bidder's shares slumped.
Caught in a bidding war that also involves its biggest shareholder, M&C said it still believed it could succeed on its own but if that was not possible it preferred the offer from Next Fifteen.
It said, on advice from Numis and Liberum, it could no longer consider the Next Fifteen's terms to be fair and reasonable, based solely on the share price fall.
Next Fifteen said it was disappointed with M&C Saatchi's decision, adding that its offer remained full and fair.
M&C, founded in 1995 by brothers Maurice and Charles Saatchi, had agreed a deal with Next Fifteen last month, fending off a rival bid by its biggest shareholder, Vin Murria's AdvancedadvT investment vehicle.
Since then Next Fifteen's share price has fallen 32%.
Earlier this month, the advertising firm removed Murria from its board after agreeing to the Next Fifteen deal, prompting Murria's AdvancedadvT to ask M&C to clarify its analysis of the financial terms of the competing bids.
In a sign of the pressures building within the group, M&C said it believed it could have a strong future if it could operate in an "unhindered environment" and then noted that Murria' 22.3% shareholding would typically give an investor significant influence.
"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 15 to be the preferred future owner," it said.
One of the biggest names in British advertising, M&C has been recovering from a 2019 accounting scandal.
In April it reported a record annual profit helped by client wins and deeper relationships with the likes of Alphabet's Google, Uber and TikTok.
($1 = 0.8143 pounds)
(Reporting by Yadarisa Shabong and Sinchita Mitra in Bengaluru; editing by Rashmi Aich, Jason Neely and Emelia Sithole-Matarise)