WPP has extended its offer for UK media buying group, Tempus, until 22 October, the group announced this morning. This is the second extension of the bid, the first closing yesterday.
In the meantime, WPP decided to seek to back out of the deal by drawing on the material adverse change clause (see
WPP Seeks Escape From Tempus Deal). This, if agreed by the Takeover Panel, would allow WPP to retract from the deal on the grounds that Tempus’ business and prospects are substantially poorer than at the time the original offer was proposed. The attacks on the US on 11 September clearly had a negative impact on Tempus’ business.
The problem for WPP, is that it continued to acquire shares in Tempus, via the market, in the days after the attacks and well after its share price had begun to fall. This suggests that the WPP’s interest in Tempus remained, despite the worsening conditions of its business.
The second problem that WPP’s chief executive Martin Sorrell might face in his discussions with the Takeover Panel, is that the effects of the terrorist attacks have affected the whole media and advertising sector, not mention the entire economy, and not specifically the Tempus business.
The discussions with the Takeover Panel are ongoing.
