US-based advertising giant set to takover Brands Hatch

US advertising giant Interpublic Group (IPG) has unveiled a recommended £120 million takeover offer for motor racing track owner Brands Hatch Leisure.

US advertising giant Interpublic Group (IPG) has unveiled a recommended £120 million takeover offer for motor racing track owner Brands Hatch Leisure.

Brands Hatch, which is taking over the contract to run the British Grand Prix at its Kent circuit, revealed last month that it had received a takeover approach but kept the bidder's identity secret.

IPG's formal share-for-share offer values each Brands Hatch share at around 546p - a premium of 36% above the average closing price of 402p during the 30 trading days before Brands Hatch said it had received an approach.

IPG said it hoped to make Brands Hatch part of its Octagon sports marketing and entertainment division.

IPG said Brands Hatch chief executive Nicola Foulston would join the management board of Octagon once the deal was complete.

Ms Foulston, 31, said her board had unanimously recommended shareholders accept the bid.

"Our vision has long been to be the leading international event promoter and venue manager in world motorsports," she said.

"To achieve this we need to expand our operations from our UK base around the world.

"Interpublic and Octagon offer us a unique opportunity to achieve this goal through their international strength and network, the funding they can provide for us to acquire international business and the international motorsports rights they already control."

Brands Hatch has been battling for planning permission to upgrade its track to Formula 1 standard.

Ms Foulston has also been trying to buy rival venue Silverstone but dropped her £43 million offer after opposition from the track's owner, the British Racing Drivers' Club.

Brands Hatch is taking over the Grand Prix contract from Silverstone in 2002, winning it back for the circuit for the first time since the mid-1980s.

The company will host Britain's biggest one-off sporting event for six years as part of a deal with Formula One Administration.

Ms Foulston took over the struggling company when her father John was killed in a Silverstone racing accident in 1987.

Octagon is one of the top three sports marketing businesses in the world and represents athletes, manages sporting events and sells TV rights and merchandising.

IPG also owns leading advertising companies Lowe Group and McCann-Erickson.

As well as the Grand Prix race track of the same name, Brands Hatch Leisure owns motor racing circuits at Snetterton, Norfolk, and Oulton Park, Cheshire.