The decision by Britain's Takeover Panel on Thursday to hold WPP Group to its agreed takeover of Tempus Group [WAMN: 25-Oct-01] sparked a same-day appeal from WPP.
In normal circumstances, a takeover bid is irrevocable once a majority of the target company’s shares have been committed to the offer. However, WPP argued it should be allowed to withdraw its £5.55 per share offer as there had been "material adverse change" in Tempus' prospects following the global economic disruption caused by the September 11 terrorist attacks in New York and Washington.
Granting leave to appeal against a panel decision is highly unusual – as is the tenacity of WPP chief executive Sir Martin Sorrel who does not take defeat lightly. Within hours of the appeal being lodged, however, the panel agreed to call a full meeting next week to hear Sir Martin’s imploration.
Observers close to Tempus believe that if the panel upholds its decision, Sir Martin’s attempts to extricate himself from the deal will do nothing to thaw the already chilly relations between executives in the two camps. Nor, say others, will certain influential WPP shareholders be best pleased.
News source: BBC Online Business News (UK); AdWeek.com