Tempus shares soared 55 per cent on the prospect of a counter-bid after the advertising buying firm announced a £425m agreed cash offer from Havas, the French advertising concern, yesterday.
Whether a bid battle does materialise depends on Sir Martin Sorrel, the chief executive of WPP Group, the number two global advertising services firm, which holds a 22 per cent stake in Tempus. Sir Martin was considering alternatives last night and requested business documents from Tempus, as potential bidders are permitted to under the City's Takeover Code
Should WPP or another advertising group, perhaps with WPP backing, decide to make a counter-bid for Tempus, it would need to occur within three weeks. WPP, which has not had representation on the Tempus board, has been a long-term shareholder in the UK media planning company. It last added to its stake earlier this year.
Chris Ingram, the chief executive and chairman of Tempus, whose 15 per cent stake in the company he founded is worth £64m, has pledged his stake to Havas. Executive directors and management, who hold a further 10 per cent, have also signed irrevocable undertakings to tender their shares.
Asked if a counter- offer was likely, Mr Ingram said: "We recommended an offer. The board, executives and managers are happy. There's a normal three-week offer period. Let's see."
Investors seemed prepared to wager a rival bid in the fast-consolidating global advertising industry was highly possible. That saw the share price of Tempus close 199.5p higher at 560p, versus the Havas bid of 541p.
That electrified trading in Tempus stock, which closed up 55 per cent in heavy dealing of 8.35 million shares – about 11 per cent of the stock. Havas itself bought more than 2 million shares in the market, adding a further three per cent to its tendered stock, taking its stake to about 28 per cent.
If the deal goes ahead, Havas will rank number four among global advertising groups, nosing ahead of Dentsu of Japan. Havas expects the enlarged company to achieve £12m in annual cost savings against combined profit of around £50m.
Separately, Publicis and Cordiant agreed to merge their media buying units Optimedia and Zenith Media. Publicis will own 75 per cent of the new company and will have an option to buy the remaining interest.Reuse content