Takeover Panel Rules Against WPP

The Takeover Panel has this morning ruled against WPP’s attempt to free itself from its 555p-a-share offer for Tempus Group. WPP had made a submission to the Takeover Panel in an attempt to invoke the Material Adverse Change clause in its initial offer citing the further deterioration of the ad market following the terrorist attacks on the US as the cause.

Analysts considered it unlikely that the Takeover Panel would rule in WPP’s favour as the incidents of 11 September affected the market as a whole and the damage was not done specifically to Tempus. In its rebuttal of WPP’s submission Tempus provided financial reports to the panel and claimed that “On the basis of the submission made by WPP, which Tempus has been permitted to see, the Board of Tempus is firmly of the view that there are no grounds for allowing the material adverse change condition to be invoked.”

In its statement this morning the Takeover Panel backed Tempus’s claim saying “Having considered each of the submissions received and the further representations made, the Panel Executive has ruled that WPP should not be permitted to invoke either condition (g)(i) or (h)(iii) [the clauses relating to Material Adverse Change].”

WPP has the right and is expected to appeal against the ruling which will probably delay the proceedings by up to a week.

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