Britain’s Takeover Panel has given the thumbs-down for the second time to Sir Martin Sorrell’s attempt to extricate WPP Group from its accepted bid for media specialist Tempus Group.

In an appeal to the Panel’s full committee – the first hearing was by its executive committee – WPP again failed to establish that there had been “material adverse change” in the fortunes of Tempus since the terrorist attacks of September 11. The Panel’s latest decision was notified early today (Thursday) to the London Stock Exchange.

There remain two sequential escape routes for Sir Martin, should he choose to explore them. The first is a plea to the Panel’s formal Appeal Committee, which on such occasions is supplemented by a senior legal figure. WPP will be free to lodge such an appeal within twenty-four hours of delivery to the respective parties of the written reasons for the Panel’s decision. This is expected early next week.

Assuming a third rejection of WPP’s case, its last resort is to seek a judicial review by the High Court. Should the review endorse the decisions of the Panel, under British law Sir Martin is still free to walk away from the Tempus deal – an unparalleled step that would terminally undermine WPP’s credibility in any future takeover or merger.

But the consensus among industry observers is that Sorrell will bite the bullet and take the consequences if WPP’s case subsequently goes before the Appeal Committee and is rejected.

News source: AdAge Global