Advertising and marketing giant M&C Saatchi has reiterated its rejection of the “derisory” £254 million takeover offer from its largest shareholder.
M&C said it continues to urge shareholders to “take no action” in response to the bid from rival Advanced Advt (ADV) – the investment vehicle of Vin Murria – and insisted the offer price was now even lower than current values.
M&C said all 18 members of its executive committee remain unanimously opposed to the ADV offer, despite further meetings with the suitor.
The M&C Saatchi directors continue to believe the ADV offer is derisory
It said: “The M&C Saatchi directors continue to believe the ADV offer is derisory.
“They believe that the ADV offer fails to reflect the growth and opportunities in front of M&C Saatchi and does not offer a fair value for the business.”
M&C also branded the bid as carrying a “high risk of damaging culture, triggering a talent exodus, revenue loss and value destruction”, while a “disregard for US regulatory (CFIUS) filings risks significant revenue loss”.
The all-share and cash-and-share offer values of 175.8p and 182.0p, respectively, are lower than the 200p share price at which ADV acquired its stake in M&C Saatchi in January and the 207.5p-a-share indicated offer price in May, according to M&C.
ADV last week said it had received acceptances for its offer for M&C Saatchi from shareholders, owning 12.77% of the company’s issued share capital and therefore controlled 22.59% of M&C.
ADV added that it had decided to bring forward the unconditional date for its offer to September 30.
If it cannot seal the deal, then ADV said it and Ms Murria will look to engage with the M&C board “to implement changes to deliver the company’s potential”.
M&C, which is particularly well known for its political advertisements for the Conservative Party, has fielded takeover approaches from Next Fifteen Communications and ADV over the past six months.
In May, M&C initially agreed to a £310 million takeover move by Next Fifteen but pulled its support a month later after the suitor’s share value plunged, impacting the value of the deal.
ADV has now made four approaches – with the most recent valuing the group at £253.6 million – but all have been batted away by M&C.
M&C has still left the door open for Next Fifteen’s 247.2p-a-share offer, however.
It said on Tuesday that the directors recognised the “strength of the strategic, commercial and cultural fit” of the Next Fifteen offer, but were unable to recommend it to shareholders due to the current Next Fifteen share price.
M&C revealed earlier this month it has spent £8.4 million fighting off the takeover approaches over the past six months.
It said statutory pre-tax profits tumbled to £0.3 million for the six months to June 30, from £4.8 million over the same period last year, largely pushed down by costs from the ongoing takeover battle.