M&C Saatchi has agreed to a £310m (€366.4m) takeover by Next Fifteen, days after the advertising group rejected a ‘hostile’ lower bid from its investment vehicle main shareholder Vin Murria.
The move by Next Fifteen, a larger communications and marketing firm, follows months of wrangling over the future of M&C after it attempted to buy out Ms Murria, a serial tech entrepreneur who owns a 12-year stake. 5% in the company.
M&C, a British advertising agency founded by the Saatchi brothers and known for its links to the Conservative Party, this week rejected Ms Murria’s sweet £254million bid via AdvancedAdvT, also known as ADV .
Gareth Davis, chairman of M&C, described as “paltry” the official offer of the vice chairman, Ms Murria’s investment vehicle. Ms. Murria and ADV hold a combined interest of approximately 22% in M&C.
On Friday, the independent directors of M&C instead gave their unanimous backing to a higher offer of £310 million in cash and shares from Next Fifteen, a listed communications group with a market value of around £1, £2 billion.
M&C shares soared nearly 35% to 222p.
Tim Dyson, chief executive of Next Fifteen, said it would bring together “two highly complementary businesses”.
“The integration of M&C Saatchi into the Next Fifteen group allows us to radically change our scale and global reach,” he added.
The Next Fifteen deal marks a potentially decisive turn in a long-running battle for M&C, which was hit by an accounting scandal in 2019 but has since stabilized its performance under new management.
Ms Murria built her stake when M&C’s share price was battered by the case and before its original founders handed the reins of the business to a longtime deputy, Moray MacLennan.
Mr MacLennan, chief executive of M&C, backed the tie-up with Next Fifteen, describing it as a “powerful accelerator” for the group’s next phase of growth.
Mr Davis, former chief executive of Imperial Tobacco, expressed his support for “this more attractive alternative offer which we believe is in the best interest of M&C”.
He said the independent directors “consider the Next Fifteen offer to be far superior to the offer announced earlier this week by ADV, and that a clear rejection of ADV’s response statement that it was strongly disagreed with its offer undervalued M&C”.
The Next Fifteen offer represents a 50% premium to M&C’s share price of 165p on Thursday. M&C shareholders would be entitled to 40 pence in cash and 0.16 new Next Fifteen shares.
Ms Murria first bid on the company in January and was able to extend talks after securing five extensions from the Takeover Panel.
Mr Davis’ defense was bolstered in January after UK regulators dropped the accounting probe into M&C. The decision drew a line under the biggest crisis for M&C since its inception in 1995. – Copyright The Financial Times Limited 2022