Dentsu makes Aegis offer at a 48% premium on yesterday’s close

Japanese advertising agency Dentsu has made an offer to purchase the Aegis media group believed to be worth £3.16 billion.

The offer from Dentsu of 240 GBp per share is a 48% premium on Aegis’ closing share price yesterday.

According to a briefing note from Merrill Lynch this morning: “Aegis’ directors have stated that they intend to unanimously recommend that Aegis shareholders accept the deal.

“Dentsu has acquired or received irrevocable undertakings in relation to 30.5% of the share capital, including 20% from the Bollore Group [the single largest shareholder which has a 26.5% stake in the company].”

The deal sent Aegis’ share price rising from a rate of 162.2 GBp at close of business yesterday (11 July) to 263.1 GBp this morning, a rise of 45%, according to the company’s own figures.

Merrill Lynch has estimated that the deal will be completed at some point between October and December, following antitrust clearances: “We expect few regulatory issues given Aegis and Dentsu’s presence in different geographic markets.

“We believe a counter offer seems unlikely given regulatory risks, leverage constraints, irrevocable undertakings and a full premium from Dentsu.”

Aegis posted pre-tax profit of £160 million last year, and was awarded an advertising contract with General Motors worth around $3 billion per year in January.

The deal looks set to create the largest marketing communications group in Asia and second largest in western Europe, according to the Guardian, by combining the fifth and seventh biggest global advertising companies.