Next Fifteen Communications Group PLC (AIM:NFC) has agreed the £310.1mln takeover of M&C Saatchi PLC (AIM:SAA), which earlier this week rejected a £253.6mln offer from AdvancedAdvT Ltd (LSE:ADVT) (ADV).
The boards of marketing and communications group Next Fifteen and advertising agency Saatchi said they had reached agreement on the terms of a recommended cash and share acquisition.
Saatchi shareholders will receive 0.1637 of a Next Fifteen share and 40p in cash, which at the last closing price equates to 247.2p per share.
The offer is a 47.6% premium to the Saatchi closing price of 167.5p on 4 January 2022, being the last day prior to ADV's announcement of its acquisition of a minority stake, and a 49.8% premium to the 165p closing price yesterday.
On Tuesday, Saatchi rejected an offer from ADV of 2.043 shares plus 40p in cash per share, with an all-share alternative of 2.530 shares for each Saatchi share, which came to 207.5p at the time and has not changed much in the three days since.
AdvancedAdvT put out its own separate announcement on Friday, saying its board is considering its options and noting that it and AdvancedAdvT and chair Vin Murria own 22.3% of M&C Saatchi's shares.
Gareth Davis, chair of M&C Saatchi, had rejected the ADV offer on Tuesday as “derisory” and said the bid “significantly undervalues the business and prospects of M&C Saatchi”.
As for the bid from Next Fifteen, he said, the board’s independent directors are “pleased to unanimously recommend this alternative, more attractive offer which we are confident is in the best interests of M&C Saatchi shareholders and M&C Saatchi's other key stakeholders”.
He added: “The M&C Saatchi independent directors all consider Next Fifteen's offer to be far superior to the offer announced earlier this week by ADV, and a clear repudiation of ADV's response statement that it strongly disagreed its bid undervalued M&C Saatchi.”
Tim Dyson, chief executive of Next Fifteen, said: “This is an exciting opportunity to bring together two highly complementary businesses creating a truly global and diversified group with exceptional capabilities, clients and talent. Bringing M&C Saatchi into the Next Fifteen group provides us with a step change in our scale and global reach, and an enhanced ability to offer digitally driven solutions to growth-minded organisations.”
Next Fifteen said in the statement that the combination would establish a “truly global platform in the digital marketing and consulting sectors, a platform that leverages top-flight creativity, technology, data, business consulting and digital marketing to deliver meaningful change for the enlarged client base”.
It said the two geographic presences are “highly complementary”, with “minimal” client overlap, “a new dimension” added to the other business from Saatchi’s expertise in public sector work and Next Fifteen’s in-house data analytics capability.
The transaction is expected to be “immediately and materially” earnings enhancing, Next Fifteen said, with the potential to unlock “significant synergies”.