Next Fifteen’s prospective offer for M&C Saatchi likely to be rejected
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Next Fifteen’s M&C Saatchi takeover approach likely to be rejected due to communications firm’s plummeting value
- On October 31, a special meeting was arranged for Saatchi .’s investors
- Vin Murria and investment vehicle AdvT are currently against Next15’s offer
- A minimum of 75% of the voting shareholders is required for the proposal to go through
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M&C Saatchi’s shareholders will vote against Next Fifteen’s offer for the ad agency when they meet in ten days.
A special meeting has been arranged for the company’s investors on October 31, where they will decide on the takeover bid, which was regulator-approved by the Competition & Markets Authority earlier this week.
At least three-quarters of voting shareholders are needed for the deal to go through, but Saatchi’s bosses have said the price is not “fair and reasonable” and are refusing to lend their support.
CEO Moray MacLennan said these were ‘results to be proud of under all circumstances’
Two of Saatchi’s most prominent backers, Vin Murria and her investment vehicle Advanced AdvT, whose combined stake in the company is approximately 22.3 percent, have already said they intend to reject the offer.
Murria and AdvT will only support the deal if Next Fifteen’s share price reaches a level where the implied value of the offer exceeds at least £1.97 per share.
In the past six months, Next Fifteen’s shares have fallen by more than a third. On Friday, they were up 2.8 percent at £8.45.
The two sides have just spent nine months trying to take over the advertising business, making a number of consecutive bids, the last being worth £254 million.
That pursuit failed in late September after very little investor support and unanimous opposition from Saatchi’s executive committee, leaving Next Fifteen the lone suitor on the table.
The media company’s offering – a mix of stock and cash – has been backed by broker Peel Hunt, who said it would be “best to weather the storm” if economic conditions deteriorate in the near term.
Next Fifteen admits, however, that the proposal is unlikely to pass, given the share’s decline since it agreed to a takeover deal for Saatchi.
Bosses at the group said a rejection by Saatchi investors would be “disappointing” but pledged to “always maintain pricing discipline in pursuing its M&A strategy, which could result in certain trades not going through.”
Saatchi was founded in 1995 by brothers Maurice and Charles after the pair were ousted in a shareholder revolt at their previous company, Saatchi & Saatchi.
Known for their close ties to the Conservative Party, its clients include some major corporate names, ranging from retail giant Amazon to fashion brands Burberry and Hugo Boss and the Dutch flagship airline KLM.
The latest financial results showed total pre-tax profits rose by more than half to £16 million thanks to strong performance from its areas of expertise, including global and social issues and sponsorship and talent.