Ad group M&C Saatchi rejects latest buyout offer from top investor
Reuters
Published May 17, 2022 08:15
Updated May 17, 2022 15:26
By Sachin Ravikumar and Shanima A
(Reuters) -M&C Saatchi on Tuesday rejected a fourth takeover offer from its biggest investor Vin Murria, saying the "derisory" proposal worth 253.6 million pounds ($316.4 million) undervalued the British advertising group's business.
Software entrepreneur Murria's acquisition vehicle AdvancedAdvT announced the fresh offer earlier, giving M&C investors a choice between receiving 2.530 new AdvancedAdvT shares for each share held or a mix of cash and shares.
Based on AdvanceAdvT's last closing share price, both options value M&C Saatchi at 207.5 pence per share, representing a 27% premium to M&C's Monday closing price. At their peak in 2018, M&C shares were worth 430 pence apiece.
AdvancedAdvT, which is also backed by private equity group Marwyn, wants to combine its digital capabilities with the brand recognition of M&C - known for its historical advertising links to Britain's ruling Conservative Party - and invest heavily in M&C to help it compete better.
"I urge shareholders to reject this bid as it significantly undervalues the business and prospects of M&C Saatchi," M&C Chairman Gareth Davis said in a statement.
M&C shares pared earlier gains of over 10% to trade 3.2% higher at 168.2 pence by 1323 GMT, while AdvancedAdvT shares were up 0.6%.
Founded in 1995 by ad mogul brothers Maurice and Charles Saatchi, M&C has been recovering from a 2019 accounting scandal but last month reported a record annual profit helped by client wins and deepened relationships with the likes of Alphabet (NASDAQ:GOOGL)'s Google, Uber (NYSE:UBER) and TikTok.
The company said its independent directors have also unanimously rejected AdvancedAdvT's offer.
AdvanceAdvT's previous all-stock approach from February was worth 2.347 AdvancedAdvT shares for each M&C share. The Ad group disclosed on Tuesday it had also rejected two other lower proposals made in January.
"ADV has access to an existing pipeline of selective (mergers & acquisitions) opportunities comprising businesses that enhance M&C Saatchi's data and analytics capability, as well as complementing the existing offering," it said.
Murria and AdvanceAdvT own 22.3% of M&C. Shareholders owning a further 20.2% have indicated their support for AdvanceAdvT's offer, it said, adding that it would add two industry veterans to the board of the combined company if a deal is completed.
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Written By: Reuters
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