Next Fifteen Communications Group PLC on Friday announced it has reached a cash-and-shares offer agreement with independent directors of M&C Saatchi PLC to buy the firm, amid a four-months long takeover attempt of M&C by AdvancedAdvT Ltd.
Next Fifteen offers 0.1637 of a Next Fifteen share and 40 pence in cash for each M&C Saatchi share, valuing M&C shares at 247.2 pence each.
This deal represents a 48% premium to M&C Saatchi's closing price of 167.5p on January 4, the last business day before London-listed acquisition vehicle AdvancedAdvT said it has taken a minority stake.
Under AdvancedAdvT's most recent offer, shareholders in M&C Saatchi will for each share held either receive 2.043 new shares in AdvancedAdvT and 40p in cash, or receive 2.530 new AdvancedAdvT shares. At the time of the offer, it valued each M&C share at 207.5p, about 40p lower than Next Fifteen's offer.
M&C Saatchi shares on Friday morning surged 34% to 220.50 pence each, while Next Fifteen traded 1.1% higher at 1,280.00p each. AdvancedAdvT shares were up 4.4% at 86.16p each.
M&C's board is recommending Next Fifteen's takeover offer and urged shareholders to take no action in respect of AdvancedAdvT's offer.
Next Fifteen's acquisition deal values M&C at about £310.1 million, Next Fifteen, a London-based digital marketing services firm, explained. AdvancedAdvT's proposal valued M&C lower, at £253.6 million.
For its part, Next Fifteen on Friday said ‘The board of Next Fifteen believes the acquisition has strong strategic and financial rationale. This is a highly compelling opportunity to combine Next Fifteen and M&C Saatchi and establish a truly global platform in the digital marketing and consulting sectors, a platform that leverages top-flight creativity, technology, data, business consulting and digital marketing to deliver meaningful change for the enlarged client base. Next Fifteen's four segments, Customer Insight, Customer Engagement, Customer Delivery and Business Transformation, represent a £1 trillion revenue global market opportunity.’
‘Next Fifteen's and M&C Saatchi's geographic presences are highly complementary. The enlarged group is expected to be a leading player with strong brands in countries across the globe, including the US, UK, Asia and Australia. This diversifies and expands Next Fifteen's and M&C Saatchi's existing exposure to attractive end-markets with favourable long-term growth trends and strong industry fundamentals,’ it added.
M&C on Tuesday called AdvancedAdvT's offer an ‘unsolicited hostile offer’ and ‘derisory’ and told shareholders to reject it. On Wednesday, AdvancedAdvT said it now had acceptances totalling a 43% stake in M&C Saatchi. AdvancedAdvT has been trying to buy M&C since January after buying a 9.8% stake in the London-based advertising agency.
AdvancedAdvT responded to the deal within minutes of Next Fifteen's announcement, saying its board is considering its options. The London-based acquisition vehicle will publish a further announcement ‘as and when appropriate,’ it said. The company added that it and Executive Chair Vin Murria together own just over 22% of M&C Saatchi's share capital. Murria also is a director of M&C Saatchi.
M&C Saatchi was founded in 1995 by ad executives Charles Saatchi and brother Maurice Saatchi, who also were behind ad agency Saatchi & Saatchi.
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