Snubbed bidder AdvancedAdvT said whilst it believes that Next Fifteen Communications is a “credible buyer” for M&C Saatchi, “its offer price does not reflect the value of foregoing control and the significant synergies available”.
It comes after the ad giant M&C announced a £310m takeover by fellow advertising agency Next Fifteen on last Friday, just days after it batted away Vin Murria’s AdvancedAdvT hostile takeover.
The investment vehicle tabled two options to investors that would allow M&C to choose to receive either a combination of cash and shares, or an all share offer of 2.530 new shares for each M&C shares.
Both options valued the company at 207.5p per share, representing a 27 per cent premium to the company’s closing price last Monday.
M&C batted away this offer, asserting that it had “undervalued” the company and didn’t take into account the growth opportunities for the firm.
In contrast, Chairman of M&C Saatchi Gareth Davis said in a statement that Next Fifteen’s £310m offer was “far superior”, and represented a 19.1 per cent premium on Murria’s All Share Offer of 2.530 ADV Shares per M&C Saatchi Share.
Nonetheless, in a mighty comeback this morning, AdvancedAdvT said: “AdvancedAdvT believes that NFC’s current offer for M&C Saatchi does not fairly reflect the potential to unlock significant synergies for M&C Saatchi Shareholders as a whole, as NFC stated in its firm offer announcement released at 7.00am on 20 May 2022.”
The investment vehicle argued that the net asset value of its offer should be considered, and Vin Murria and the company would “continue to consider their options”.
AdvancedAdvT and Vin Murria notably own 22.3 per cent of M&C Saatchi’s issued share capital.
Brokers at Peel Hunt also aired their reluctance, giving the stock a ‘Hold’ rating. They said that while they were “surprised” by the deal with Next Fifteen, they said it “makes strategic sense”.
Peel Hunt upped the target price for M&C Saatchi from 208p to 247p