M&C Saatchi has agreed to a £310million takeover by fellow advertising agency Next Fifteen.
It comes just days after the company rejected a ‘hostile’ takeover approach by tech entrepreneur Vin Murria, with M&C Saatchi’s board describing the Net Fifteen bid as ‘far superior’ to that of its largest shareholder.
The advertising group rejected a sweetened offer by Murria’s investment vehicle Advanced AdvT, which valued the company at £254million, with chairman Gareth Davis labelling the bid as ‘derisory’.
M&C Saatchi’s independent directors have unanimously recommended a cash and share offer by London-listed advertising and marketing company Next Fifteen
M&C Saatchi’s independent directors instead unanimously recommended a cash and share offer by London-listed advertising and marketing company Next Fifteen valuing each M&C share at 247.2p.
The bid trumps AdvT’s offer of 207.50p per M&C share tabled earlier this week and valuing the company at £253.6million.
In response to the announcement, AdvT said it was ‘considering its options’.
‘A further announcement will be made as and when appropriate,’ the company added in a short statement to investors.
Next Fifteen’s chief executive, Tim Dyson, said the deal would bring together ‘two highly complementary businesses’.
‘M&C Saatchi is synonymous with creativity and strategy, whereas Next Fifteen has built a reputation around its technology and data driven offering,’ he added.
‘This makes for a great combination, and we are confident we can accelerate the ambitions of both businesses, creating significant value for our clients, our people and our shareholders.’
M&C Saatchi shares jumped 34 per cent to 221.42p in morning trading on Friday, while Next Fifteen shares were up 1.4 per cent at £12.84.
Next Fifteen, which has a market value of around £1.2billion, owns a series of brands, including market research firm Savanta and account-based marketing company Agent3.
The merged group is expected to be a ‘leading player with strong brands’ in countries around the world, including the US, UK, Asia and Australia, the companies said.
‘The M&C Saatchi Independent Directors all consider Next Fifteen’s offer to be far superior to the offer announced earlier this week by ADV, and a clear repudiation of ADV’s response statement that it strongly disagreed its bid undervalued M&C Saatchi,’ Davis added.
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