Tempus Group has refused to give WPP Group ceo Sir Martin Sorrell access to financial information in case he uses it to wriggle out of WPP’s proposed takeover deal.
Sorrell is believed to have requested Tempus trading data for the last two months to decide whether to try to ditch the 555p per share bid launched in August [WAMN: 21-Aug-01].
However, Tempus chairman Chris Ingram, no friend of Sorrell, turned down the request, claiming that WPP, still a rival company, could not be given access to sensitive information.
Although its bid has been accepted and made unconditional, WPP is thought to be mulling an appeal to the Takeover Panel, arguing that the fall in world markets since the September 11 attacks on the US constitutes a ‘material adverse change’, allowing it to pull out of the deal under British law.
However, its chances of succeeding in such an appeal have been thrown into doubt by a report from Credit Suisse First Boston, which argues the deal will be completed whatever Sorrell’s decision.
CSFB concludes that the ‘material adverse change’ law applies only to specific companies, not to whole industries or market downturns. Consequently, the Takeover Panel, unwilling to start a new precedent, is unlikely to accept an appeal citing the rule from WPP.
Although profits at Tempus are believed to have dropped in recent months, its share price has been kept high by speculation over its future. However, the current price of 495p is well below the 555p offered by WPP.
Nevertheless, in some good news for Sorrell, CSFB added: “Overpaying by £200–£300 million for Tempus is not catastrophic for a company of WPP’s size.”
News sources: CampaignLive (UK); Adweek.com