Shares in takeover target M&C Saatchi PLC (AIM:SAA) tumbled 9.5% to 190p after its suitor, AdvancedAdvT Limited, confirmed it is interested in making an offer for the company but its preference is for a share exchange.
The City seemed less keen on this option than a takeover option that includes a cash element.
The board of AdvancedAdvT, chaired by Vin Murria, the deputy chair of Saatchi, believes the merged group would have the opportunity to create significant value for shareholders.
“A merger would create an opportunity to build a data, analytics and digitally focussed creative marketing business with a strong balance sheet and additional management expertise in transforming businesses at pace and execute on complementary M&A [mergers & acquisition]. This would allow the enlarged group to continue its evolution and, crucially, accelerate the implementation of its growth strategy and therefore be increasingly relevant to its customers,” the stock market announcement from AdvancedAdvT said.
Murria owns a 12.5% stake in Saatchi while AdvancedAdvT owns around 9.8% of the fabled advertising agency.
Trading in the shares of AdvancedAdvT has been suspended pending developments in its reverse takeover proposal.