M&C Saatchi withdraws support for US$387m acquisition by Next Fifteen

M&C Saatchi has withdrawn support for the US$387.2 million takeover bid by Next Fifteen Group as it "no longer considers the terms of the offer to be fair and reasonable", the agency said in a regulatory filing. This was solely on the basis of the deterioration of value of Next Fifteen shares since the announcement date.

According to The Guardian, Next Fifteen's market value dipped to US$1.08 billion from US$1.47 billion at the time the deal was announced. Next Fifteen had initially tabled a cash and share offer that valued M&C Saatchi at 247.2 pence a share. The offer comprises 0.1637 of new Next Fifteen share and 40 pence in cash.

Since the deterioration of Next Fiften share price, however, M&C Saatchi sad that while the offer terms remain unchanged, they now imply a total value of 189 pence per M&C Saatchi share based on the closing price of a Next Fifeteen share of 910 pence on 16 June.

Accordingly, the M&C Saatchi Directors "unanimously [recommended]" that M&C Saatchi Shareholders do not vote in favour of the scheme at the court meeting on 17 June, the filing said.

On the other hand, Next Fifteen's CEO Tim Dyson said in a filing: "We remain firmly of the belief that M&C Saatchi plus Next 15 is a great combination. It will bring together two highly complementary businesses, creating a truly global and diversified group with exceptional capabilities, clients and talent."

The company also explained that its share price had dipped in line with relevant market indices and sector peers. Next Fifteen also encouraged M&C shareholders to vote in favour of the takeover, adding that the acquisition represents "the most attractive of the choices facing M&C Saatchi shareholders and provides the greatest opportunities for the future development of M&C Saatchi's businesses".

Separately, Next Fifteen said in May that the acquisition presented a “compelling opportunity to combine Next Fifteen and M&C Saatchi and establish a truly global platform” in the digital marketing and consulting sectors. With the acquisition, Next Fifteen aims to build a growth consultancy that combines specialist capabilities with global scale.

Meanwhile, M&C Saatchi rejected four offers from tech entrepreneur Vin Murria’s investment vehicle AdvancedAdvT (ADV) since January. The agency's independent directors also previously considered Next Fifteen's offer to be far superior to the offer by ADV, M&C Saatchi's chair, Gareth Davis, said a few months ago.

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