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M&C Saatchi and Next Fifteen postpone meetings on potential £310m takeover offer

M&C Saatchi and media group Next Fifteen postpone meetings on potential £310m takeover offer

  • M&C Saatchi’s board had previously agreed in May to Next Fifteen’s £310m bid 
  • The firm has also fervently rejected a series of rival offers from Advanced Advt
  • Clients of M&C Saatchi have included Adidas, Reebok, and retail giant Amazon  

Two meetings that were set to decide upon the proposed takeover of M&C Saatchi have been delayed.

The advertising agency and its prospective buyer, media company Next Fifteen Communications, were both due to conduct meetings on 19 August to vote on the £310million bid.

Those meetings have now been postponed ‘until such time as the regulatory conditions to the acquisition have been satisfied,’ Next Fifteen told investors in a trading update.

Postponement: M&C Saatchi and its prospective buyer, media company Next 15, were both due to conduct meetings on 19 August to vote on the £310million bid

M&C Saatchi’s board had originally agreed in May to the deal, which offered its shareholders 0.1637 of one of its shares and 40p in cash in return for each Saatchi share.

But in June, they changed their mind after Next Fifteen’s share price tumbled by 30 per cent, causing the offer’s value to drop significantly.

M&C Saatchi has also rejected a series of rival proposals from Advanced Advt, the investment vehicle of its largest shareholder, Vin Murria, who was the advertising firm’s deputy chair until earlier this summer.

Murria’s fourth and latest offer for the business was worth £253.6million, an approach described as ‘derisory’ by M&C’s chairman Gareth Davis, who said it heavily undervalued the company and its prospects.

All members of the firm’s executive committee also voiced their opposition to the deal, claiming it would risk an exodus of talent from the business.

Investors still have until this Saturday to accept the bid, though approval is required from at least three-quarters of them for it to pass, and Murria has said she would not raise her offer.

Today’s announcement comes just over a week after M&C revealed its first-half revenues grew by 10 per cent on the prior year as a result of strong performances in the UK, Americas and Asia.

The AIM-listed group said the results made it confident of achieving its forecast headline pre-tax profits of £31million this year.

M&C was co-founded by brothers Maurice and Charles Saatchi in 1995 after a shareholder revolt led to the pair being deposed from Saatchi & Saatchi, the agency they began 25 years previously.

Their clients have comprised some extremely famous corporate names, ranging from retail behemoth Amazon to sporting goods makers Reebok and Adidas and The Pokemon Company.

It is also famous for its deep ties with the Conservative Party, creating the infamous ‘New Labour, New Danger’ adverts for the 1997 General Election when the party lost by a massive landslide.

In recent years, the business has been affected by an accounting scandal that led to the departure of Maurice and three other directors, as well as a year-long investigation by the Financial Conduct Authority.

The FCA ended their probe in January, taking no enforcement action.

M&C Saatchi shares were flat on Monday morning at £1.53, meaning their value has declined by over 9 per cent so far this year.