WPP is playing for time by extending the offer period for its
£437 million takeover bid for Tempus Group after receiving a
majority vote in favour of the deal from Tempus shareholders.
Sir Martin Sorrell, WPP's chief executive, has until 15 October to try
to extricate the group from the now costly bid, should he want to.
However, it is thought Sorrell is still keen to add another media
network to WPP's empire, and with Aegis considered too expensive, his
options are limited.
Almost 94 per cent of Tempus' shareholders this week voted for WPP's
555p per share bid - a significantly higher price than the existing
trading figure of around 490p.
Poor results reported by Tempus last week revealing a 3 per cent fall in
profits to £10.2 million have further fuelled speculation that
Sorrell will look for a way out of the deal.
The deal still needs to be vetted by the anti-competition
authorities.
Lorna Tilbian, a media analyst at Numis, commented: "This may give
Sorrell more chance to withdraw if he chooses."
The "no material adverse change" clause could provide an exit route if
WPP argues that the market has deteriorated since it made its offer
because of the existing downturn in the media market. However, WPP may
have blocked this get-out route by buying Tempus shares after the
terrorist attacks on the US. The move showed Sorrell to be reasserting
his faith in the value of Tempus, despite the fall in confidence of
media stocks in the aftermath of 11 September.
Bob Willott, the editor of Marketing Services Financial Intelligence,
said he expects the deal to go ahead, but added: "WPP is paying too high
a price and it's not a good time to pay excessive prices for new
acquisitions."
The future of Chris Ingram, Tempus' chief executive, still remains
unclear.
Despite his well-known antipathy to Sorrell, Ingram, who owns about 15
per cent of Tempus, was obliged to recommend shareholders accept the WPP
bid.
However, insiders said that Ingram was still non-committal as to whether
he would accept a senior position within WPP's media offering.
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