M&C Saatchi directors ‘will quit’ if hostile bid succeeds

M&C Saatchi’s board has vowed to quit in protest if a hostile takeover bid is successful, as the tech entrepreneur Vin Murria launches a charm offensive with shareholders.

Chief executive Moray Maclennan and independent directors have refused an invitation to remain in post over fears that her £254m bid significantly undervalues the agency and would pose a “substantial risk” to its future.

M&C Saatchi was founded in 1995 by Maurice and Charles Saatchi, the brothers best known for Margaret Thatcher’s “Labour Isn’t Working” advertisement that helped propel the Conservatives to power in 1979.

Ms Murria, the company’s deputy chairman and largest shareholder with a 12.5pc personal stake, has appealed to investors to back the offer after the board rebutted a string of proposals made by her takeover vehicle Advancedadvt.

She admitted her attempts to seek the independent director’s backing since January had failed, but urged investors to rally behind the latest approach.

The formal offer through her shell investment firm gives investors two options: either 2,043 of Advt’s shares for M&C Saatchi shares plus 40p in cash, or an all-share option that hands them 2,503 of new Advt’s shares.

Rebutting the bid, Gareth Davies, the chairman of M&C Saatchi, said the offer representing a 27pc premium on Monday’s closing share price was “derisory” and “undervalues the business and prospects”.

M&C Saatchi, which has been fighting back from an accounting scandal and steep downturn across the advertising sector, said the independent directors rejected the offer because it was “materially below” January’s approach that valued the company at 230p per share.

Mr Maclennan said: “The non-executive directors have declined to take up an offer to join the new M&C Saatchi board, and I have declined that invitation as well.”