M&C Saatchi future in doubt as bosses spurn £310m offer

M&C SAATCHI has rejected two takeover offers for the business, but admits that it may struggle to operate as a stand-alone ad agency.

The company founded by Margaret Thatcher’s favourite admen has made an about-turn on its decision to back a £310m swoop made by the marketing consultancy Next Fifteen.

The board has bowed to investor pressure by pulling its support.

The deal’s value has recently declined with Next Fifteen’s shares plunging by more than a third since May, leading to shareholder pressure on M&C.

Meanwhile, M&C continues to oppose a £254m hostile bid from the investment vehicle Advancedadvt controlled by Vin Murria, the company’s biggest shareholder and former deputy chairman.

Shares in M&C and Next Fifteen fell respectively by 7pc to 165p and 2pc to 892p yesterday on the London Stock Exchange.

In a statement, M&C told investors that it considered Next Fifteen’s and Advanced’s offers to be “inferior” to its “stand-alone prospects”, but warned that there was “no certainty” it could deliver those in the way the board “currently envisages”.

It added: “The M&C Saatchi directors have no indication as to what approach Vin Murria and Advancedadvt would take in this situation except that the M&C Saatchi directors have been notified that in the event that neither the Advancedadvt offer nor Next Fifteen offer is successful.

“In the event that the M&C Saatchi directors do not re-appoint Vin Murria as a director of M&C Saatchi, they would consider convening a general meeting seeking her re-appointment.”

Ms Murria and Artisan Partners, the hedge fund with a 1.1pc stake in M&C, had been calling for a U-turn on the Next Fifteen deal.

Artisan said the marketing consultancy’s cash and share offer was “too low” and it should push for a higher price of 350p.

Tim Dyson, chief executive of Next Fifteen, said he still believed a merger of the two firms would be a “great combination”. He added: “We believe our offer is full and fair.”