Ben Bold
Jun 20, 2022

M&C Saatchi withdraws support for Next 15 takeover

Next 15’s current share price values M&C Saatchi at about £233.7 million, marking a significant decline on the original £310 million valuation.

Next 15 CEO Tim Dyson (left) and M&C Saatchi CEO Moray MacLennan.
Next 15 CEO Tim Dyson (left) and M&C Saatchi CEO Moray MacLennan.

M&C Saatchi's board has withdrawn its support for Next 15's original £310 million offer for the business after the latter's share-price drop since the agreement in May.

Next 15's share price has fallen to 892 pence, marking a 30% decline since its 20 May offer. M&C Saatchi's directors said in a statement that they "no longer consider the terms of the Next 15 offer to be fair and reasonable solely on the basis of the deterioration in value of Next 15 shares". It recommended that shareholders vote against the takeover.

Next 15 chief executive Tim Dyson has responded, insisting that the group's offer is "full and fair" and that it did not consider that the volatility of the marketplace "undermines the fundamental proposition" of the transaction.

In spite of its withdrawal of support, M&C Saatchi's directors have expressed their preference for a deal with Next 15 as opposed to one with Vin Murria's AdvancedAdvT investment vehicle, which has been in a bidding war for the agency. 

Earlier this month, Murria was removed from the M&C Saatchi board in the wake of Next 15's offer. Murria's most recent offer of £253.6m, made on 17 May, was rejected by the agency as "derisory". AdvancedAdvT has since noted Next 15's declining share price across nine days following its offer for M&C Saatchi.

In a statement on Friday (17 June), M&C Saatchi urged shareholders not to back Next 15's offer. It said: "Based solely on financial terms, the M&C Saatchi directors consider each of the [AdvancedAdvT] offer and Next 15 offer to be inferior to M&C Saatchi's standalone prospects.

"However, if those standalone prospects were incapable of being delivered as envisaged, then the M&C Saatchi directors consider the Next 15 offer to be superior to the ADV offer and Next 15 to be the preferred future owner of the M&C Saatchi business for the reasons set out below, including the strategic, commercial, employee and cultural advantages which the M&C Saatchi directors consider Next 15 to offer the M&C Saatchi business."

Jessica Pok, an analyst at Peel Hunt, noted that "at this stage, we would not rule out the possibility of another acquirer appearing".

She continued: "We continue to believe M&C Saatchi is a good asset with strong reputation in the creative world that would be further strengthened with right investment into adding digital capabilities."

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