WPP Seeks Escape From Tempus Deal

Following months of negotiation, global media group WPP has now announced that it is seeking the consent of the Takeover Panel to invoke the material adverse change condition in relation to its offer for Tempus Group.

In a statement issued this morning, WPP said that it “remains convinced of the strategic merits of combining WPP and Tempus. However, it is the unanimous view of the WPP board that there has been a material adverse change in the prospects of the Tempus Group following the announcement of WPP’s Offer and, in particular, following the terrorist attacks in the United States on 11 September 2001. The board of WPP has therefore concluded that it is in WPP shareholders’ best interests to seek to invoke the material adverse change condition.”

WPP has slowly been building its interest in Tempus over past months in preparation for the take over. However at the time of reaching the 90% acceptance level required to go ahead with the bid, WPP reiterated the ‘no material adverse change’ clause in its original offer prompting speculation that the adverse market conditions had taken their toll on the company’s finances.

Although the ad market has deteriorated considerably following the attacks on the US, the Takeover Panel may not be sympathetic to WPP’s request as it continued to increase its stake in Tempus after 11th September.

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