Can tech queen seal deal to buy leading ad firm?
As Vin Murria goes hostile in her £254million bid for M&C Saatchi . . .
Tech tycoon Vin Murria has gone hostile in her swoop
on M&c Saatchi after the iconic advertising agency repeatedly rebuffed her takeover attempts.
The UK’s so-called tech queen tabled a £253.6m offer and said she will seek the approval of shareholders directly, bypassing Saatchi’s board.
It comes after months of wrangling between Murria, who is Saatchi’s deputy chairman, and the other directors, whose support for a bid has ‘not been forthcoming’. It also comes after the board slapped down three previous offers that they saw as opportunistic and seriously undervaluing the company.
The latest offer follows results last month in which Saatchi announced plans to resume dividend payments after booking a record £21.6m profit in 2021, bouncing back from an £8.5m loss in 2020.
M&c Saatchi hit back at the bid yesterday, branding Murria’s offer ‘derisory’ in a statement that set the stage for a bitter takeover battle. Murria said her offer has already secured the backing of 42.5pc of shareholders. But questions were raised over whether she can get the deal over the line as it emerged just 4pc of Saatchi’s shareholders, excluding her, have given their irrevocable backing to the deal.
Serial investor Murria first bought a stake in the AIM-listed company in April 2020, snapping up a 13.5pc chunk. But she emerged as a bidder in earnest this January when she picked up a further 9.8pc through her investment vehicle Advanced Advt. It took her total stake in the business to 22.3pc.
Saatchi rejected an all-share offer from the Indian-born businesswoman just days later. She sweetened her investors later that month and offered up 40p and 1.633 shares in Advt per share to Saatchi’s shareholders, but this was also rejected. Murria’s third improved offer was also rejected.
Brothers Maurice and charles Saatchi founded M&c Saatchi in 1995 after an American activist investor ousted them from their firm, Saatchi & Saatchi, which was behind Margaret Thatcher’s ‘Labour Isn’t Working’ campaign.
M&c Saatchi went on to work for the conservative Party designing the iconic New Labour New Danger poster ahead of the 1997 general election. Other clients have included Burberry, Apple and chocolatier Lindt.
The company’s share price hit an all-time high in March 2019, but in August that year it disclosed an accounting scandal. After more problems came to light, the company had to restate its results for previous years and take an £11.6m accounting charge.
Four directors, including Maurice Saatchi, left the company at the height of the crisis. In November 2020, the so-called ‘three amigos’ who co-founded the business with the Saatchis – chief executive David Kershaw, chairman Jeremy Sinclair and executive director Bill Muirhead – also left.
The pandemic was painful for the advertising industry but M&c Saatchi is recovering. Murria, 60, founded Advanced computer Software Group, which began as a £12m tiddler. It was sold to Vista equity Partners in 2015 for £750m.
The mother of one has received awards for her work buying, creating and turning around companies. She was awarded an OBe in 2018 for services to the British digital economy and she sits on the boards of firms including Bunzl and Softcat.
Murria has faced fierce opposition from Saatchi’s board, who have all promised to quit if shareholders approve her takeover. They fear if Murria, pictured, gains control, the agency will face an exodus of its top talent who could start or join rival firms and poach back old clients. Directors also feel Murria’s proposal undervalues the business and her strategy is wrong. Saatchi has recently won a series of high-profile clients including Uber, Google, TikTok and Tinder, which it said shows its existing strategy is working. chairman Gareth Davis said yesterday: ‘This offer is derisory. I urge shareholders to reject this bid as it significantly undervalues the business and prospects of M&c Saatchi.’ In a lengthy stock market filing the entrepreneur sought to address concerns from investors and Saatchi’s board that her takeover will lead to an exodus of talent and clients at the agency. She said: ‘The people are the heartbeat of the business. In working alongside them, we believe we will create a business that will benefit employees, clients, and shareholders by capitalising on the growth opportunities presented by the structural changes in M&c Saatchi’s markets.’ A formal offer document will be sent to shareholders within a month setting out a timetable that will see them vote around a month later.