WPP Waits On Tempus Results Before Making A Move
WPP is thought to be waiting to have a look at the interim financials of UK media planning and buying agency Tempus before deciding whether or not to proceed with its 555p per share takeover plan (see Tempus Confirms WPP Offer).
It has been suggested that WPP’s counter-bid to Havas was thrown in merely to drive up the French group’s costs of acquiring Tempus, rather than as a serious takeover proposal. This seems unlikely, though, given that WPP has continued to buy up shares in Tempus over the last couple of weeks.
Havas’ decision to pull out of the bid was predicated mainly on the downturn in advertising and the exacerbating effects on this brought about by the attacks in the US. Add to this the recent falls in Tempus’ share price and Havas’ withdrawal is not very surprising.
The decline in the value of Tempus stock – which nose-dived to 422½p after the Havas announcement – makes WPP’s 555p offer look a bit expensive. However, analysts say that WPP’s strategy to acquire Tempus and merge its CIA media buying division with WPP’s own Media Edge business remains a good one.
WPP’s bid closes on 1 October and it has now been recommended by Tempus to its shareholders. WPP will most likely have the opportunity to renege on its offer on technical grounds, including delays in the regulatory process or adverse material changes in Tempus’ business. Any such changes may well show up in Tempus’ interim financial results, which are expected tomorrow.
