M&C Saatchi bid talks go into extra time

Board has rejected a third offer from Vin Murria’s AdvancedAdvT.

A composite image of Vin Murria and M&C Saatchi's headquarters
Vin Murria: improved, third offer has been rejected by M&C Saatchi's board

M&C Saatchi has agreed for takeover talks with Vin Murria’s investment vehicle, AdvancedAdvT, to be extended for another month, even as it rejected its third bid.

Stockmarket regulations had imposed a deadline for AdvancedAdvT to “put up or shut up” today (3 February), after making its first approach at the start of January.

Murria’s vehicle has made three offers – the latest of which, on deadline day, is the equivalent of 230p per M&C Saatchi share, with shareholders able to accept either shares in AdvancedAdvT or a mix of AdvancedAdvT shares and 40p in cash.

This is an improvement on her previous offer, which allowed M&C Saatchi shareholders to take either 220p per share in AdvancedAdvT shares or a lower amount of 200p in a mix of AdvancedAdvT shares and cash.

In response to the latest bid, the independent directors of M&C Saatchi reiterated their view that the bid undervalues the agency group and flagged their “concerns” about AdvancedAdvT.

These include “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 incentivisation of M&C Saatchi 's key management and employees; and the valuation of AdvT’s ordinary shares”.

Gavin Davis, the chairman of M&C Saatchi, and the other independent directors said they met Murria, the top shareholder in M&C Saatchi, and Marwyn, the private equity firm which backs AdvancedAdvT, on 28 January and have also had “extensive dialogue” with other shareholders to assess the bid.

“The unanimous conclusion of the independent directors is that the further revised proposal continues to undervalue the company and its prospects and would therefore not be recommendable,” M&C Saatchi said. “However, the independent directors believe that it is in the best interests of all stakeholders in M&C Saatchi to continue to engage constructively in discussions with AdvT.”

Under the rules of the City’s Takeover Code, AdvancedAdvT is expected to be given a new 28-day "put up or shut up" deadline to agree terms until 3 March.

This morning M&C Saatchi’s share price rose only modestly, by 3% to about 183p, indicating continuing uncertainty about the likelihood of a deal or a rival offer.

Peel Hunt, a stockbroker, said it had valued M&C Saatchi at 230p per share “but that doesn’t include a bid premium”. 

Another industry observer pointed out AdvancedAdvT’s shares were suspended at the start of January, following its first bid approach for M&C Saatchi. Valuations across the tech sector, in particular, have tumbled since, which could affect the appetite of M&C Saatchi shareholders to accept stock, rather than cash, this observer said.

Murria is a former software technology entrepreneur, with little management experience of advertising, although she has been deputy chairman of M&C Saatchi since 2021 and is a former non-executive director of Chime, the owner of VCCP.

The independent directors of M&C Saatchi warned last month that the takeover approach could lead to a talent exodus, saying: “The proposed transaction with AdvT would cause disruption to the company and its ability to continue to retain key employees.”


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