M&C Saatchi investor urges it to reject Next Fifteen bid
AN ADVERTISING agency founded by Margaret Thatcher’s favourite ad-men is being urged to snub a takeover bid after its suitor’s share price plunged.
M&C Saatchi has been told by Artisan Partners, the hedge fund with a 1.1pc stake in the company, to about-turn on its decision to back Next Fifteen’s offer, which was worth £310m in May.
In a letter to the board, Artisan said the marketing consultancy’s cash and share offer was “too low” and it should push for a higher price of 350p.
The intervention follows Next Fifteen’s shares slumping after it tabled a bid on the promise that it would create a “diversified group” with strength in technology and data.
Anand Vasagiri, the co-portfolio manager at Artisan, said: “Given the approximate 15pc drop in Next Fifteen Communication’s share price since the announcement, the NFC offer is now even less appropriate, and with no antidilution component to the offer, M&C shareholders remain at risk of continued deterioration in their eventual realised value.
“Moreover, these low valuations do not factor in the substantial synergies NFC will gain post-transaction.
“Consequently, we feel the sale of such a valuable franchise at a depressed multiple and valuation is an unacceptable outcome for M&C shareholders.”
The letter follows a decision by M&C’S board to oust its rogue deputy chairman Vin Murria, whose offer to buy the ad agency through her takeover vehicle Advancedadvt was outbid by Next Fifteen. Ms Murria, who joined in March last year, is the company’s largest shareholder controlling 22pc of voting shares through personal holdings and that of Advancedadvt.
She made a direct appeal to M&C’S shareholders last month to back her £254m hostile bid after the directors repeatedly rebuffed her approaches.
M&C Saatchi was founded in 1995 by brothers Maurice and Charles Saatchi, best known for Thatcher’s “Labour Isn’t Working” advert that helped propel the Conservatives to power in 1979.
The board of M&C Saatchi declined to comment.