Takeover Panel rejects WPP appeal on Tempus

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The Independent Online

Sir Martin Sorrell's WPP was dealt a fresh blow yesterday after the advertising giant lost an appeal to the City's Takeover Panel over its £432m bid for the media buyer Tempus. The panel decided it would not reverse an earlier decision that WPP must proceed with its takeover.

The panel, chaired by Peter Scott QC, did not immediately disclose the reasons for the decision, which upheld a ruling last week, but expects to reveal the information on Monday, "or shortly after".

WPP will be allowed to appeal yet again, after both parties have seen the panel's reasoning, and will have 24 hours to lodge a fresh appeal. WPP said it would wait to see the panel's logic before deciding its next move.

This latest, precedent-setting decision adds to a takeover saga that began in August when Sir Martin launched a 555p-a-share takeover offer for Tempus, trumping an earlier bid from Havas of France.

The events of 11 September and concurrent collapse of the advertising market prompted Sir Martin to seek to invoke a rarely used clause to abandon the deal on the grounds that Tempus's prospects had been materially adversely affected.

Tempus called for WPP to accept the panel's decision and "bring to an end a period of uncertainty, particularly for the people at Tempus".

If Sir Martin contests the panel's latest ruling his appeal would be heard next week by a three-member appeal committee. Sources close to the panel said WPP could appeal on procedural grounds or on the basis that the decision was flawed.

Analysts said Sir Martin should back down and focus on integrating Tempus into his group. While in theory WPP could still walk away from the bid, ignoring the panel's ruling, such a move would ruin Sir Martin's reputation and make it hard for him to chase deals in the future. WPP shares gained 1.5p to 624p while Tempus added 5p to 527.5p.

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