M&C Saatchi PLC (AIM:SAA) has made a U-turn and told shareholders not to support a proposed takeover from Next Fifteen Communications Group PLC (AIM:NFC) as the suitor's share price has fallen.
Last month the board of the advertising agency agreed what was a £310mln takeover by Next 15, which was structured at 40p cash and 0.1637 of Next 15 shares per M&C share.
Shares in Next 15 have fallen from close to 1,300p at the time of the takeover agreement on 20 May to below 900p this morning.
The M&C directors also last month rejected a bid from AdvancedAdvT Ltd (LSE:ADVT), the investment vehicle of its largest shareholder, Vin Murria, which then went hostile with its bid.
The directors also said they continue to reject AdvancedAdvT’s bid.
In this morning's statement, M&C said directors "unanimously recommend" that shareholders "do not vote in favour" of the Next 15 scheme nor of the special resolution to be proposed at its general meeting.
M&C's directors said they consider both the Next 15 and ADVT offers "to be inferior to M&C Saatchi's standalone prospects", though if these prospects "were incapable of being delivered as envisaged", then they "consider the Next 15 Offer to be superior" to the ADVT offer.
Broker Peel Hunt said it "would not rule out the possibility of another acquirer appearing".