WPP is likely considering halting its takeover bid of the Tempus
Group because of the dire condition of the world economy and its finance
markets, which have been shaken by the deadly terrorist strikes on New
York and Washington more than two weeks ago.
The atrocities have severely impacted the advertising industry in Asia
as well as the rest of the world (see analysis, p14), however, it is
WPP's bid for Tempus which agencies have focused on.
WPP's move was aimed at thwarting Havas' bid for Tempus. But last week,
Havas pulled out of the deal fearing a global recession was now
imminent.
Sources said that WPP chairman Martin Sorrell wants out of the deal
because of poor economic trend numbers, unsteady financial markets, and
Tempus' announcement this week that its first half profit fell three per
cent year-on-year.
Sorrell had earlier ruled out a mega merger this year (media, June 8)
but it appears that Havas' initial offer for Tempus may have forced his
hand. Stock analysts said the only way out was if there was a material
change in the situation surrounding the offer, but they pointed out that
WPP purchased another batch of Tempus shares just last week.
But given the slump in the advertising market, it's believed that
Sorrell could use Tempus' interim results as an excuse to wriggle out of
the bid.
