M&C Saatchi has agreed a £310 million (€366.4m) takeover by Next Fifteen, days after the advertising group rejected a lower "hostile" offer from the investment vehicle of its largest shareholder Vin Murria.
The move by Next Fifteen, a larger communications and marketing company, follows months of wrangling over M&C’s future after the takeover attempt by Ms Murria, a serial tech entrepreneur who owns a 12.5 per cent stake in the company.
M&C, a British ad agency founded by the Saatchi brothers and known for its ties to the Conservative party, this week rejected Ms Murria's sweetened offer of £254 million through AdvancedAdvT, also known as ADV.
Gareth Davis, M&C's chairman, described the formal bid by the deputy chairman, Ms Murria's investment vehicle as "derisory". Ms Murria and ADV hold a combined stake of about 22 per cent in M&C.
M&C’s independent directors on Friday instead gave their unanimous support for a higher £310 million cash and shares offer from Next Fifteen, a listed communications group with a market value of about £1.2 billion.
Shares in M&C soared almost 35 per cent to 222p.
Tim Dyson, chief executive of Next Fifteen, said it would bring together "two highly complementary businesses".
“Bringing M&C Saatchi into the Next Fifteen group provides us with a step change in our scale and global reach,” he added.
The agreement with Next Fifteen 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 steadied performance under new management.
Ms Murria built her stake when M&C’s share price had been beaten down by the affair and before its original founders had handed over the reins of the company to a long-serving deputy, Moray MacLennan.
Mr MacLennan, M&C’s chief executive, has backed the tie-up with Next Fifteen, describing it as a “powerful accelerator” for the group’s next phase of growth.
Mr Davis, a former Imperial Tobacco chief executive, expressed his support for “this alternative, more attractive offer which we are confident is in the best interest of M&C”.
He said the independent directors “consider Next Fifteen’s offer to be far superior to the offer announced earlier this week by ADV, and a clear repudiation of ADV’s response statement that it strongly disagreed its bid undervalued M&C”.
The Next Fifteen offer represents a 50 per cent premium on M&C’s share price of 165p on Thursday. M&C shareholders would be entitled to 40p in cash and 0.16 new Next Fifteen shares.
Ms Murria first made a bid for the company in January, and was able to prolong talks after securing five extensions from the Takeover Panel.
Mr Davis’ defence was strengthened in January after UK regulators dropped the accounting investigation into M&C. The decision drew a line under a the biggest crisis for M&C since it was founded in 1995. – Copyright The Financial Times Limited 2022
