The board of M&C Saatchi has withdrawn its support for a takeover offer from Next Fifteen, a digital marketing company.
The latest twist in the battle for the global advertising group, founded in 1995 by Maurice and Charles Saatchi, leaves the field open again.
Next Fifteen had made a $381 million takeover offer but since that time its shares have fallen in value by as much as 30%, degrading the total value of the deal.
The company wouldn’t increase the cash and shares deal, so the board of M&C Saatchi withdrew support saying the deal was no longer “fair and reasonable”.
The falling share value of Next5 Fifteen meant that the original offer had fallen to 189 pence a share from 247.2 pence.
Tim Dyson, CEO of Next Fifteen: “We remain firmly of the belief that this is an exciting opportunity to bring together two highly complementary businesses, creating a truly global and diversified group with exceptional capabilities, clients and talent.”
M&C Saatchi, according to Next Fifteen's vision, would become a consultancy taking on the big four consulting and marketing services groups.
Internally, the key 18 senior executives running M&C Saatchi had expressed “strong” support for the deal but that was before the value of the bid fell.
Previously M&C Saatchi had removed software entrepreneur Vin Murria, its former deputy chair, from the board following a failed takeover bid via her AdvT investment vehicle which had valued the company at £254 million.
The M&C Saatchi directors now consider the ADV Offer and Next 15 Offer to be “inferior” to M&C Saatchi's standalone prospects.
M&C Saatchi reported better than expected results for the year to December with net revenue growth of 10.6% and like-for-like growth of 15.1%.
The company posted record headline operating profit £31.1m, up from £12 million in 2020 and a statutory profit before tax of £21.6 million versus a £8.5 million loss.
The company says the strong trading performance and momentum has continued into the first quarter of 2022.
M&C Saatchi is now forecasting headline profit before tax in the region of £31.0m for the year to December.
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