WPP Group has thrown in the towel in its attempts to wriggle out of its £434 million bid for Tempus Group, after an emergency board meeting held yesterday (Tuesday).
Having had its attempts to quash the deal rejected by both the executive of the Takeover Panel – a self-regulatory City watchdog – and the entire panel itself, WPP announced that it would not try to take its case to the body’s appeal committee.
“Throughout the bid process, the board of WPP has remained convinced of the long-term strategic benefits of combining WPP with Tempus, particularly in connection with the merger of CIA [Tempus’s media buying network] and TME [WPP’s The Media Edge] and the combination of the Tempus strategic marketing businesses with WPP’s strategic marketing consultancies,” stated WPP after the board meeting, called by non-executive chairman Phil Lader.
“WPP’s objective is now for both management teams to work closely together to integrate the two businesses and capitalise on the strategic benefits as quickly as possible.”
Sir Martin Sorrell, group chief executive of WPP, had been eager to drop the bid, claiming Tempus had suffered a ‘material adverse change’ since September 11 [WAMN: 11-Oct-01]. However, the Takeover Panel revealed Sorrell had “failed by a considerable margin” to make a convincing case to nullify the purchase.
Tempus immediately advised its shareholders to accept the offer. “The mood is just one of relief and delight,” said one source at the group. “We were getting to the point where the uncertainty was getting in the way of business.”
The deal – already dubbed the first ever “hostile sale” by City wags – will see the merger of CIA and TME, creating the fourth largest media network in the world with billings of over £10 billion.
Chris Ingram, founder and chairman of Tempus, will be offered the chair of the enlarged WPP media arm, titled Group MindShare Edge, alongside Beth Gordon, TME’s chairwoman.
However, the deal will see Ingram work for Sorrell, a man he has publicly criticised, and it remains far from certain that he will stay on. Needless to say, his dismay may be tempered by the £64m he stands to make from the sale of his own 13% holding.
News sources: Adweek.com; Financial Times; MediaGuardian.co.uk