M&C Saatchi rejects third takeover proposal from Vin Murria
M&C Saatchi Group has rejected a third takeover proposal from its biggest shareholder, Vin Murria, and her backers.
M&C Saatchi has rejected a third takeover proposal
The board of British agency said the offer “continues to undervalue the company and its prospects and would therefore not be recommendable“.
However, an extension to the time allowed for takeover negotiations has been granted by the UK’s Takeover Panel, meaning discussions over the agency’s future are set to continue in earnest for at least another month.
What has happened?
Vin Murria, a British tech entrepreneur, is M&C Saatchi’s largest single shareholder. Last month, through an acquisition vehicle called AdvancedAdvT backed by Murria and an investment firm, she began an attempt to buy M&C with the intention of making it the center of a new digital marketing group.
But M&C Saatchi’s board, which would have to recommend any offer to the firm’s other shareholders, has already rejected two proposals. This morning it announced that a third proposal had been received and turned down.
The proposal would have offered M&C shareholders a choice between a share exchange and cash, or a wholesale swap of shares in M&C in exchange for a stake in AdvancedAdvT.
In a statement to the stock market, M&C’s board said it had rejected that proposal because of concerns over “the continued undervaluation of the company; the strategy of the enlarged AdvT group and, in particular, the lack of clarity over the deliverability of, and execution risk associated with, their proposed ’digital-led M&A’ strategy; the impact on culture; how AdvT intends to ensure the retention and appropriate incentivization of M&C Saatchi’s key management and employees; and the valuation of AdvT’s ordinary shares“.
What does this mean for the future of the agency?
The drama is far from over. In Britain, major shareholders are given a window of time in which to declare their interest in acquiring a firm – known as the ‘put up or shut up‘ deadline.
That window was set to expire today (February 3), but M&C‘s board has requested an extension from the UK‘s Takeover Panel, the statutory body that regulates stock market acquisitions. Its statement said: “It is in the best interests of all stakeholders in M&C Saatchi to continue to engage constructively in discussions with AdvT.“
That will give Murria and her backers a month‘s grace period. In the meantime, the directors restated their confidence in the company‘s fortunes.
In a statement, they said: “The company’s robust financial performance in 2021 and the momentum into the start of 2022... positions the company strongly for further growth and provides the independent directors with increasing confidence in the success of its strategy. As a result, they remain confident in M&C Saatchi’s ability to create material shareholder value.“