Advertising group M&C Saatchi has rejected a fresh takeover approach from the acquisition vehicle of its top shareholder Vin Murria.
Murria’s AdvancedAdvT said on Monday that it had floated two options, one an all-share offer that values each M&C share at around 220p or an alternative structure that includes some cash and values them at around 200 pence.
It said the paper offer represented a 20.7 per cent increase on its previous proposal, but that the agency’s independent directors had rejected it late on Sunday.
M&C shares are up over five per cent this morning at 180.75p.
Founded in 1995 by ad mogul brothers Maurice and Charles Saatchi, M&C has been recovering from a 2019 accounting scandal and argues that the offer does not reflect its expected future growth. It has said it sees little merit in a deal that does not offer its shareholders a full premium.
For its part, the vehicle of the software entrepreneur Murria has said it would combine its digital capabilities with the brand recognition of M&C, and invest heavily to help it better compete.
Murria is M&C’s deputy chairman and biggest investor. She owns 12.5 per cent of M&C directly, while AdvancedAdvT owns another 9.8 per cent.
The British businesswoman made her name by founding Advanced Computer Software until it was acquired in 2015.
AdvancedAdvT said in this morning’s statement that it would propose a new board structure after a merger that would see Saatchi’s Moray MacLennan continue as chief executive and AdvancedAdvT’s Gavin Hugill become chief operating officer of the merged entity.
Vin Murria would act as chairperson with a majority of independent directors.
It comes after M&C Saatchi’s trading update last week revealed that its full-year 2021 headline profit before tax would be ahead of expectations, while a regulatory investigation into the group’s accounting had closed without any enforcement action.
According to Reuters, analysts at Peel Hunt said with the group’s recent strong trading and the closure of the investigation it believed a further improved offer would be required; AdvancedAdvT has until February 3 to provide a formal offer, they said.