Vin Murria’s investment vehicle gets another four-week extension to ‘set up or close’ deadline to bid on M&C Saatchi
- AdvT had until 5 p.m. today to make a solid offer to the group
- Vin Murria is the main shareholder of M&C Saatchi, with a 12.5% stake
- M&C bosses have rejected previous offers, partly on underpricing grounds
The acquisition vehicle vying to buy M&C Saatchi has four more weeks to make a tender offer.
AdvancedAdvT previously had until 5 p.m. today to present a strong offer for the group, after receiving an extension from the City Takeover Panel earlier this month and in early February.
But M&C Saatchi today confirmed an extension to the ‘set up or close’ period.
Big names: M&C Saatchi customers include audiobook service Audible, beverage makers Coca-Cola and Heineken, and sporting goods giants Reebok and Adidas
Led by tech tycoon and Saatchi vice-chairman Vin Murria, the investment firm now has until April 28 to say whether it will make a takeover offer or walk away – although that deadline has the potential to change. to be extended again.
He already owns a 9.8% stake in the ad agency, which he bought in early January for £24m, while Murria is Saatchi’s largest shareholder with a 12.5% stake.
AdvT originally offered to swap 1.86 of its shares for each M&C Saatchi share, a deal which valued M&C Saatchi at around £220 million, along with two other offers in the second half of January which were also rejected.
Its most recent revised proposal offered M&C Saatchi investors either 1.94 of its shares or 40p in cash in return for each Saatchi share, a mix and match facility where the proportion of shares and cash can vary, or an all-stock offering.
Yet all of these suggestions were dismissed by M&C Saatchi bosses, who claimed they were grossly undervaluing their business and leaving the future of current employees uncertain.
In addition, bosses raised concerns about the effect it would have on their company culture, and the lack of detail and level of risk in AdvT’s “digital” M&A strategy.
Discussions are still ongoing and the deadline could be extended a fourth time if the company’s independent directors and the city’s takeover bid committee agree to such action.
Victoria Scholar, Head of Investments at Interactive Investor, said: “The question is whether AdvancedAdvT is prepared to sweeten its offer enough to complete the deal, which M&C Saatchi hopes an additional month will help achieve.”
“The last rejected offer came back on January 27, and nothing has been filed since, suggesting that the two parties may finally find it difficult to meet in the middle of the evaluation.
“While the extension of the deadline offers a glimmer of hope, the recent drop in M&C Saatchi’s share price suggests that investor confidence in the deal is waning.”
M&C Saatchi was founded in 1995 by brothers Maurice and Charles after they were expelled from the former agency they co-founded, Saatchi & Saatchi, following a major shareholder uprising.
Known for its close association with the Conservative Party, the group has worked with some of the world’s most famous brands across a wide range of sectors, including sports, fashion, energy and technology.
These include audiobook and podcast service Audible, beverage makers Coca-Cola and Heineken, sporting goods giants Reebok and Adidas, and media conglomerate Discovery.
Listed on the AIM submarket of the London Stock Exchange, M&C Saatchi Shares closed trading down 1.5% at 163.5p on Thursday.