Britain’s takeover panel has rejected an attempt by WPP to invoke a rarely used clause to abandon its £432 million sterling bid for media buyer Tempus.
WPP, the world's second-largest advertising group, said it would consider whether to appeal the panel executive's decision to the full Takeover Panel.
WPP is trying to escape from its 555p-per-share accepted Tempus offer, which it says should be abandoned because of the "material adverse change" in the media buyer's prospects since the September 11th attacks in the United States.
The rejection coincided with WPP reporting a 6 per cent fall in comparable third-quarter revenues, which came as no surprise to most analysts and investors. The stock gained six per cent to 592p, in line with a recent sector rebound.
"Every major media company has come out with bad news in the last month, and now they're rising again," said Mr Mark Westwood at the UK office of fund manager Legg Mason, a top WPP shareholder.
WPP said the effects of September 11th on its own business meant it would be "very difficult" to meet its 2001 operating margin target of 15 per cent if exceptional losses are included, meaning the margin would be closer to 14 per cent.
The impact had largely fallen on North America, although there had been material effects on WPP's business in Britain and continental Europe as well as Asia-Pacific and Latin America. Public relations has been hit hardest, WPP said.